Aspirational consumers in India are now opting for used car leasing trend in the country, highlighting the rising trend of used car leasing in India. The recent online survey was conducted by PumPumPum, which is an Indian startup empowering smart car ownership for millennials. The survey findings witnessed that there has been a significant increase in the second-hand luxury car buyers. Additionally, the recently carried out survey also found that the used cars are costlier in Mumbai than New Delhi. It also addressed how prices vary depending on the city it is being retailed. Another interesting finding of the survey is that the sharpest dip in the car value is during the first year of its purchase.
The survey was carried out across metros and non-metro cities by reaching out to over 10,000 consumers. More than 75 per cent male and 25 per cent female respondents participated in this online survey, with work profiles ranging from Senior executives to homemakers. The survey majorly focused on the aspects of understanding the used car buying and leasing segment in the country. This included used car buyers, cars on sale, the best way to buy or sell car in the second-hand car market, car value depreciation and buyer sentiments for second cars.
As per the survey, around 80 per cent used car buyers are male whereas the remaining 20 per cent are female. Talking about the age-wise preferences, consumers between the age group of 24-27 years preferred budget cars whereas the ones in the age group of 30-32 years prefer the mid-range sedan. Moreover, the luxury car buyers fell in the age group of 38-40 years. The survey also highlighted used car market is 40 per cent for metros and 60 per cent for non- metros. However, the new trend of used car leasing comprises 90 per cent metros and 10 per cent non-metros.
Another interesting finding of the online survey is that 55 per cent of first-time car buyers are major used car buyers followed by 41 per cent with multiple cars in a family. And, the remaining 4 per cent are replacement buyers. According to the survey, 27 per cent business owners, 38 per cent senior executives and 13 per cent junior executives are primary consumers in this segment. The consumers indicated affordability as the major reason behind selecting a pre-owned car. Other key reasons for opting for a used car are value for money, second car house-hold, learning driving etc, says the survey. Going by the geographical nature of the buyers, North India has the largest population of used car buyers with 36 per cent followed with West, South and East with 27 per cent, 26 per cent 11 per cent respectively.
Sameer Kalra, Co-Founder & Chief Growth Officer at PumPumPum said, "Emphasising on the rising trend of Used Car Leasing amongst the Aspirational Bharat Consumer our survey highlights some interesting consumer sentiment shifts. Average ownership of firsthand used cars in India is approximately 24-30 months and is dramatically decreasing. As compared to buying and maintaining a car for 24 months, a leased car for 24 months turns out to be extremely affordable and hassle-free. Issues related to lack of trust on dealers, low penetration of financing in used car space, risk of repairs in a used car, non-transparent pricing (lack of standard price parameters), low resale value of the third hand used car resulting in a high rate of depreciation are some of the factors pushing the growth of Used Car Leasing in India."
Additionally, the consumers also look for attributes while purchasing a used car, which includes product quality, brand trust and a good match. The consumers voted 36 per cent for product quality, 32 per cent for brand trust and 17 per cent for a good match. Also, small cars remain the mainstay of the used cars accounting for 80 per cent of the total cars retailed. The survey found that white is the most preferred colour among used car buyers and black being the least in demand.
Tarun Lawadia, Founder & CEO, PumPumPum said, "In the new informed world order pre-owned car leasing is moving from being a lifestyle and an aspirational product to a perfectly placed end to end mobility solution. People are willing to avoid using public transport, cabs etc. for travel, pushing back the concept of 'shared mobility'. Customers are now looking for short-term financial commitments with easy exit options and corporates are seeking affordable car leasing models as an end to end employee mobility solution. In the current pandemic situation, the primary focus of companies is to make sure that every employee who commutes to office travels with minimal infection risk. These factors are jointly gearing up the Indian Car service ecosystem to shift towards the Used Car Leasing category."