Used Cars Consumer Preferences Evolve: Quality, Safety, and Fuel Efficiency Drive Used Car Demand

The Indian used car market is undergoing a significant transformation, driven by evolving consumer preferences that prioritize quality, safety, and fuel efficiency. This shift is reshaping the landscape of the industry, making it more dynamic and competitive.

Quality and Certification
Consumers are increasingly seeking certified pre-owned cars that have undergone thorough inspections and refurbishments. This trend is bolstered by the entry of organized players like Maruti True Value and Car Dekho, which offer certified vehicles with warranties, ensuring peace of mind for buyers. The organized sector’s share in the market is projected to rise from 29% in FY 2023 to 45% by FY 20281.

Safety Concerns
Safety has become a paramount concern for used car buyers. The demand for vehicles with advanced safety features is on the rise, reflecting a broader shift towards safer transportation options. This is particularly evident in the growing preference for SUVs and sedans, which are perceived to offer better safety compared to hatchbacks.

Fuel Efficiency
With rising fuel prices, fuel efficiency has emerged as a critical factor influencing consumer choices. Petrol cars dominate the used car market with a 65% share, as they are seen as more economical compared to diesel vehicles2. Additionally, the market for electric and hybrid vehicles is gradually expanding, driven by environmental concerns and government incentives.

Market Growth and Future Prospects
The Indian used car market, valued at $32.44 billion in FY 2023, is expected to nearly double to $72.95 billion by FY 202834. This growth is fueled by increasing disposable incomes, shorter vehicle replacement cycles, and the fading social stigma associated with owning a used car5. The market is projected to reach 10 million units by FY 2028, up from 5.1 million units in FY 20231.

In conclusion, the evolving preferences of Indian consumers towards quality, safety, and fuel efficiency are driving the growth of the used car market. As organized players continue to capture market share and technological advancements make the buying process more transparent and efficient, the future of the used car industry in India looks promising.

For more insights, refer IBB Report 2023