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Global Used Car Market Research Report, 2029

Global Used Car Market Research Report, 2029

Actual Market Research 31-01-2024 207 Pages Figures : 38 Tables : 163 Region : Global Category : Automotive & Transport Transportation

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The decision to buy a car is a significant milestone, and for many, it involves weighing the pros and cons of purchasing a new vehicle versus a used one. While the appeal of that new car smell and the latest features is undeniable, the used car market offers a plethora of benefits that shouldn't be overlooked. The used car industry, a dynamic and ever-evolving sector, plays a pivotal role in the automotive landscape. As technology advances and consumer preferences shift, the market for pre-owned vehicles continues to grow and adapt. Over the years, this market has experienced steady growth, fueled by factors such as rising new car prices, improved vehicle longevity, and the increasing acceptance of used cars among consumers. Shifting consumer preferences have a profound impact on the used car industry. Today's buyers are more value-conscious, seeking reliable and affordable options. The industry responds by offering a diverse range of used vehicles, from budget-friendly economy cars to premium models, catering to a broad spectrum of consumer needs. The advent of online platforms has revolutionized how used cars are bought and sold. Digital marketplaces, auction sites, and certified pre-owned programs have made the process more transparent and convenient. Consumers can now research, compare, and even purchase used cars from the comfort of their homes, enhancing accessibility and choice. Certified pre-owned (CPO) programs have gained prominence in the used car industry. These programs, offered by manufacturers, provide consumers with the assurance of a thoroughly inspected and refurbished vehicle. The inclusion of extended warranties and additional benefits enhances the appeal of CPO vehicles, attracting buyers looking for reliability and peace of mind. The integration of advanced technology is not limited to new cars; it has become a defining feature of the used car market as well. Many pre-owned vehicles now come equipped with the latest safety features, infotainment systems, and connectivity options, blurring the lines between new and used in terms of technological sophistication. According to the research report, “Global Used Car Market Outlook, 2028” published by Bonafide Research, the market is anticipated to cross USD 2 Trillion by 2029, increasing from USD 1.84 Trillion in 2023. The market is expected to grow with 6.11% CAGR by 2024-29. Environmental consciousness is influencing the choices of both car manufacturers and consumers. As the automotive industry transitions towards greener alternatives, the used car market plays a role in sustainability by extending the lifespan of vehicles and reducing the overall carbon footprint associated with car production. One of the primary attractions of buying a used car is the significant cost savings. New cars depreciate rapidly during the first few years, but a used car has already absorbed this initial depreciation. Savvy buyers can enjoy a reliable vehicle without the hefty price tag. Insurance premiums are typically lower for used cars compared to their brand-new counterparts. The lower value of the vehicle and reduced risk of theft contribute to these cost savings. Many manufacturers offer certified pre-owned (CPO) programs, providing additional peace of mind to buyers. CPO vehicles undergo rigorous inspections and often come with extended warranties, making them a compelling option for those seeking the reliability of a new car without the associated costs. Modern cars are built to last, and advancements in automotive technology mean that even cars a few years old often come equipped with features that were considered cutting-edge not too long ago. From advanced safety features to infotainment systems, used cars can offer a tech-savvy driving experience. New cars experience their steepest depreciation in the first few years. By purchasing a used car, buyers sidestep this initial loss in value, preserving more of their investment over time. The used car industry is a multifaceted sector that reflects the evolving needs and expectations of modern consumers. As it continues to expand and integrate technological advancements, the industry provides an array of opportunities for buyers, sellers, and ancillary service providers. Market Drivers • Economic Factors: Economic conditions play a pivotal role in driving the global used car industry. During economic downturns, consumers often turn to the used car market as a cost-effective alternative to buying new vehicles. The affordability and value proposition of used cars become particularly attractive when disposable income is under pressure. Conversely, during periods of economic prosperity, consumers may choose to upgrade to newer models, creating a fluid and responsive market. • Technological Advancements: The integration of advanced technologies in vehicles serves as a significant driver for the used car industry. As new cars are equipped with cutting-edge features, older models entering the used car market often retain a substantial portion of these technological advancements. Features such as advanced safety systems, connectivity options, and fuel-efficient technologies contribute to the appeal of used cars, especially for buyers who seek modern amenities without the hefty price tag associated with new vehicles. Market Challenges • Trust and Transparency: Building trust remains a critical challenge in the used car industry. Concerns about undisclosed vehicle issues, inaccurate mileage readings, and fraudulent activities persist. The lack of transparency can hinder the buying process and impact consumer confidence. To address this challenge, the industry needs to invest in technologies like blockchain for secure and transparent recording of vehicle history, maintenance records, and ownership changes. • Market Fragmentation and Regulation: The used car industry is highly fragmented, with diverse market practices and regulations across different regions. This can complicate cross-border transactions and create challenges for both buyers and sellers. Harmonizing regulatory frameworks and industry standards would contribute to a more streamlined and efficient global used car market. Market Trends • Rise of Online Platforms: Digitalization has transformed the used car buying process, with online platforms playing a central role. Consumers can now browse, compare, and purchase used cars from the comfort of their homes. The convenience of online transactions, coupled with features like virtual inspections and home delivery, is a trend reshaping how used cars are bought and sold. • Emphasis on Sustainability: Environmental concerns are influencing consumer choices, leading to a trend where sustainability becomes a key consideration in the used car market. The industry is witnessing a growing demand for fuel-efficient and electric vehicles in the used car segment. This shift aligns with broader efforts to reduce carbon footprints and promotes the longevity of existing vehicles, contributing to a more environmentally conscious industry. Covid-19 Impacts The pandemic disrupted global supply chains, leading to shortages of new cars. This scarcity of new vehicles, coupled with production delays, has increased demand for used cars as consumers look for alternative transportation options. The imbalance between supply and demand has, in some cases, driven up prices in the used car market. The economic fallout of the pandemic has led to financial uncertainty for many individuals. As a result, consumers are reevaluating their spending habits and seeking cost-effective options. Used cars, known for their lower prices compared to new ones, have become a more attractive choice for budget-conscious buyers. The overall uncertainty caused by the pandemic has led to market volatility. Fluctuations in consumer demand, economic conditions, and supply chain disruptions have created challenges for dealerships and sellers in predicting and adapting to market conditions. Some consumers, facing financial constraints during the pandemic, may delay maintenance on their existing vehicles or postpone plans to upgrade to a new one. This behavior has influenced the availability of used cars in the market, impacting both sellers and buyers. In various regions, government stimulus packages and incentives to boost economic recovery have included measures related to the automotive industry. Some countries have introduced programs encouraging the purchase of new or used vehicles, offering tax credits or financial assistance. These initiatives aim to stimulate the automotive sector amid economic challenges. Lockdowns and social distancing measures have accelerated the adoption of online platforms for buying and selling used cars. Digital marketplaces and virtual showrooms have become essential tools for dealerships, enabling them to reach customers in a contactless manner. This shift toward online transactions is likely to persist even beyond the pandemic. Conventional vehicles, particularly those powered by gasoline or diesel engines, have been the standard for decades due to the existing infrastructure, including fueling stations and maintenance facilities and are well-established and widely accessible. Used conventional vehicles often come with a price advantage compared to their electric or hybrid counterparts. The initial cost of traditional vehicles is generally lower, and this affordability contributes to their popularity in the used car market, especially among budget-conscious consumers. Conventional vehicles have been the primary choice for consumers for a long time, resulting in a large pool of used models available in the market. This abundance of options, spanning various makes and models, provides consumers with a wide range of choices when shopping for used cars. Internal combustion engine technology has matured over the years, leading to reliable and well-understood mechanisms. Many consumers trust the proven reliability of conventional vehicles, contributing to their dominance in the used car market. The familiarity of mechanics and technicians with traditional engine technology also plays a role in the perceived reliability of these vehicles. Conventional vehicles cover a broad spectrum of body types and segments, including sedans, SUVs, trucks, and more. This diversity allows consumers to find a used vehicle that aligns with their specific needs, whether it is for family transportation, off-road capabilities, or commercial purposes. While electric vehicles are gaining popularity, the transition from conventional to electric is still ongoing. Many consumers are gradually adopting EVs, but a large portion of the used car market is still dominated by traditional vehicles. As EV technology matures and gains wider acceptance, the dynamics of the used car market may see further shifts. Based on the body type, sedan segment is leading the market as they offer a balance of comfort, space, and fuel efficiency, making them a preferred choice for various individuals. Sedans, especially compact and midsize models, are often more affordable than larger vehicles like SUVs or trucks. The lower initial cost and overall cost of ownership make sedans an attractive option for budget-conscious consumers in the used car market. Sedans are generally known for their fuel efficiency, making them a practical choice for everyday commuting. In an era where fuel prices can be a significant concern for consumers, the cost-effectiveness of sedans in terms of fuel consumption contributes to their popularity in the used car market. Sedans come in various sizes, offering versatility for different lifestyles and needs. They are suitable for small families, individuals, or commuters looking for a comfortable and practical daily driver. The well-balanced combination of size and features appeals to a broad audience. Sedans are typically known for their easy handling and maneuverability. Their smaller size makes them more maneuverable in urban environments, and they are often easier to park compared to larger vehicles like SUVs or trucks. This characteristic can be appealing to a wide range of drivers. Sedans often prioritize comfort for both the driver and passengers. They are equipped with features that enhance the overall driving experience, such as advanced infotainment systems, climate control, and other amenities. These factors contribute to the appeal of sedans in the used car market. Sedans have been popular for many years, leading to a large pool of used models available in the market. The widespread availability of used sedans provides consumers with a diverse range of options, allowing them to find a model that suits their preferences and budget. Economic considerations, including lower insurance costs and maintenance expenses, make sedans an economical choice for many consumers. The overall affordability of ownership, including both the purchase price and ongoing costs, contributes to the dominance of sedans in the used car market. The petrol segment held the largest market share in 2023 attributed to the declining usage of diesel vehicles as the government discourages the purchase of used diesel vehicles. A petrol car uses a spark-ignited internal combustion engine. It is designed to run on petrol and similar volatile fuels. The majority of cars on the market today are powered by gasoline. Additionally, a large portion of the petrol vehicles is used cars. The price of these fuel-type vehicles is reasonable compared to diesel and other cars. Some of the most popular gasoline-powered vehicles sold worldwide are the Ford F-150, Honda CR-V, and Toyota RAV4. The elements that drive the desire for petrol cars in the used car market are low prices, less engine noise compared to diesel, and greater market availability. Petrol is widely available, and the infrastructure for petrol distribution, including gas stations, is well-established. The convenience and accessibility of petrol fueling stations contribute to the popularity of petrol-powered vehicles, making them a practical choice for used car buyers. Continuous advancements in petrol engine technology have led to improved fuel efficiency. Modern petrol engines often offer a good balance between power and fuel economy, addressing concerns about ongoing fuel costs for used car owners. Petrol engines are generally perceived as fewer complexes than diesel or hybrid engines, resulting in easier maintenance and repairs. The simplicity of petrol engines can translate to lower maintenance costs, making petrol-powered used cars attractive to buyers concerned about ongoing expenses. Petrol engines are well-suited for urban driving conditions, where frequent starts and stops are common. The efficiency of petrol engines in city driving contributes to their popularity among used car buyers, especially those residing in urban areas. While not as environmentally friendly as electric or hybrid alternatives, petrol engines often produce lower CO2 emissions compared to some diesel engines. This factor may be a consideration for used car buyers who are conscious of the environmental impact of their vehicle. The mid-sized segment is expected to prominent market growth over the forecast period attributed to people's preference for economical and compact-size vehicles. Mid-sized cars offer a balanced size those appeals to a broad range of consumers. They are often seen as versatile, providing enough interior space for comfortable seating and storage while remaining maneuverable and easy to park, making them suitable for a variety of lifestyles. Many mid-sized cars are designed with fuel efficiency in mind. Their size allows for efficient use of fuel, making them attractive to consumers looking for economical options, especially given rising concerns about fuel prices and environmental consciousness. Mid-sized cars often strike a balance between compact cars and larger vehicles, providing a middle ground in terms of pricing. The affordability of mid-sized used cars makes them accessible to a wide range of consumers, contributing to their popularity in the used car market. Mid-sized cars frequently come equipped with a range of comfort and safety features. These features, combined with a comfortable interior, make mid-sized cars appealing to individuals and families seeking a reliable and well-equipped vehicle. Mid-sized cars often hold their resale value well. The combination of affordability, fuel efficiency, and a practical size contributes to their attractiveness in the used car market, as consumers are more likely to consider them for resale or trade-in. The mid-sized car segment is diverse, offering various makes and models with different features, styles, and performance options. This diversity allows consumers to choose a mid-sized car that aligns with their preferences and needs, contributing to the segment's popularity. Mid-sized cars are versatile enough to be suitable for both urban and suburban environments. Their size makes them manageable in city traffic, while still providing enough space for family use or longer trips. Mid-sized cars from reputable manufacturers are often known for their reliability and longevity. This perception of durability makes mid-sized used cars appealing to buyers seeking a vehicle with a proven track record. Based on the vendor type, unorganized vendors are leading the market as they encompass a wide range of sellers, such as private individuals, small independent dealerships, and informal car sellers. The unorganized segment primarily consists of small, independent used car dealers and individual sellers. These sellers often operate on a smaller scale compared to large, organized dealerships, but their collective presence contributes to a significant market share. Small, unorganized sellers often have a deep understanding of the local market and customer preferences. Their ability to provide personalized service and establish a direct connection with buyers can be appealing to customers looking for a more individualized buying experience. Unorganized sellers are often more flexible in terms of pricing and negotiation. This flexibility can attract budget-conscious buyers seeking a better deal and willing to engage in a more fluid negotiation process. The unorganized segment may offer a more diverse inventory of used cars, including unique or hard-to-find models. Buyers looking for specific makes, models, or vintage cars may find more options within the unorganized market compared to larger, organized dealerships. Small, unorganized sellers typically have lower overhead costs and operational expenses compared to larger dealerships. This cost advantage allows them to offer competitive pricing on used cars, making them attractive to cost-conscious consumers. Many unorganized sellers rely on local advertising, word-of-mouth, and community connections to attract buyers. This grassroots approach can be effective in reaching local customers who trust recommendations from friends, family, or neighbors. The used car market, especially in the unorganized segment, often has a relatively low barrier to entry for new sellers. This ease of entry encourages more individuals to participate in selling used cars, contributing to the overall dominance of the unorganized segment. Based on the distribution channel, the offline segment held a considerable market share in 2023 attributed to the consumer's preference for the conventional buying mode. Offline sales are the method of purchasing used cars through physical dealerships, private sellers, and auctions. People can visit dealerships, inspect vehicles in person, take test drives, and negotiate prices face-to-face with sellers. In line with this, offline sales channels offer a level of personal interaction, trust-building, and the opportunity to physically examine the vehicles. Traditional offline sales channels, such as brick-and-mortar dealerships and individual sellers, have an established physical infrastructure. Dealerships often have showrooms, lots, and service centers that provide a tangible and accessible location for consumers to explore and purchase used cars. Offline sales channels allow for direct personal interaction between buyers and sellers. Potential buyers can physically visit dealerships, inspect vehicles, and take test drives. This hands-on experience is often considered crucial in the decision-making process for used car buyers. Physical dealerships and local sellers contribute to a sense of trust and credibility. The presence of a physical location in the community can build trust among consumers, as it signifies a commitment to the local market and provides a place for after-sales services and support. Offline sales channels offer the opportunity for face-to-face negotiation between buyers and sellers. This negotiation process can be crucial for both parties to reach a mutually beneficial agreement, and many buyers prefer the interpersonal aspect of negotiating in person. Brick-and-mortar dealerships provide after-sales support, including service centers, maintenance, and warranty services. This comprehensive support system is appealing to buyers who value ongoing assistance and maintenance for their used vehicles. Offline sellers often rely on local advertising, word-of-mouth, and community connections to attract customers. This localized approach can be effective in reaching potential buyers within a specific region and leveraging personal recommendations. Based on the region, North America dominated the market with the largest revenue share as the used car market in North America offers a wide variety of vehicles, ranging from recent models with modern features to older classics. North America stands as another key region in the market, driven by the thriving automotive sector. Besides this, the wide availability of various ranges of used car models in enhanced condition is supporting the growth of the market. Furthermore, the presence of organized vendors, including franchised dealerships and certified pre-owned programs, ensures a high level of trust and transparency, which is impelling the market growth in the region. North America is predicted to see a growth in demand for used automobiles compared to other regions because it has one of the highest rates of used car sales in nations like the U.S., Canada, and Mexico. Due to the high price of new cars, it is projected that the market for used vehicles in North America will expand significantly. Businesses in this area are growing their dealership network to reach more clients. Due to increased internet usage, online resources for buying or researching used cars, warranties offered on pre-owned vehicles, and various purchasing options, the North American used car market is anticipated to expand significantly during the forecast period. North American consumers are well aware of the rapid depreciation of new cars in their first few years. This has led to a culture of savvy car buyers who recognize the value in purchasing used cars that have already absorbed the initial depreciation. The strong resale value of many used vehicles makes them an attractive option for cost-conscious consumers. North America boasts a vast and diverse used car market with a wide range of vehicles available to cater to various preferences and budgets. The market includes everything from economical compact cars to luxury vehicles and trucks, providing options for a broad spectrum of consumers. The adoption of online platforms for buying and selling used cars has been significant in North America. Digital marketplaces and websites provide consumers with extensive options, allowing them to research, compare, and purchase vehicles online. The convenience and transparency offered by digital platforms contribute to the popularity of the used car market. Key players in the market are focusing on strengthening their online presence by engaging in partnerships with online marketplaces or developing their own e-commerce platforms. This allows them to reach a broader consumer base and offer more transparent and convenient buying experiences. In line with this, manufacturers are organizing certified pre-owned (CPO) programs, which involve inspecting, refurbishing, and certifying used cars to meet specific quality standards. Moreover, these programs enhance trust among buyers in used cars. Apart from this, companies are incorporating advanced technologies, such as artificial intelligence (AI) and data analytics to improve inventory management, pricing strategies, and engagement of individuals. • By early 2024, Volvo intends to have a third of its volume come from its certified used-car sector, which it will start in September 2022 and spread throughout the country. Volvo uses the 'Selekt' platform, which it just introduced in India with two dealerships, to run its {{keyword}} business worldwide. • In May 2023, CarMax, the omnichannel used-car retailer, announced amplifying its customer outreach initiatives and elevating the overall customer experience by integrating the language models and Azure OpenAI that power ChatGPT. • In June 2023, Jardine Cycle & Carriage Limited, the investment arm of Hong Kong-based Jardine Matheson collaborated with Southeast Asian car marketplace Carro. According to a joint statement by the companies, this collaboration will provide Carro with access to a broader selection of high-quality used cars while enabling Carro to improve Republic Auto's digital services and offerings. The alliance aims to strengthen both companies' positions in the market and enhance their customer experiences. Considered in this report • Historic year: 2018 • Base year: 2023 • Estimated year: 2024 • Forecast year: 2029 Aspects covered in this report • Used Car market Outlook with its value and forecast along with its segments • Various drivers and challenges • On-going trends and developments • Top profiled companies • Strategic recommendation By Vehicle Type • Conventional • Hybrid • Electric By Body type • Hatchbacks • Sedan • SUV & MUV • Others By Fuel Type • Petrol • Diesel • Others By Size • Mid-Size • Compact • SUVs By Vendor Type • Organized • Unorganized By Distribution Channel • Offline • Online By Offline Distribution Channel • Independent Dealer • Franchise Dealer • Private Sellers • Others (Used Car Auctions, Certified Pre-Owned (CPO) Programs, Consignment Dealerships, etc) The approach of the report: This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources. Intended audience This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Used Car industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.

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