Used Car Market to grow at 9.40% CAGR in Value Terms by 2027
Increasing preference for a used car as it is very
cost-effective compared to a new car is to drive the global used car market through
2027.
According to TechSci Research report “Used Car Market- Global Industry Size,
Share, Trends, Competition, Opportunity, and Forecast, 2017-2027F”, Global used car market stood around
USD 813.79 billion in the
year 2021 and is estimated to reach USD1375.43 billion
in 2027 growing with a CAGR of 9.40%
in the forecasted years. The global used car market is driven by the growing vehicle
usage across the country, as the used cars have many benefits over new cars
such as a used car being way cheaper than a new car as its value has already
undergone depreciation, they have lower customization
costs compared to a new car, and lower insurance premiums as well. Used cars
come with warranties that cover the most expensive components of a car such as
a drivetrain for 200,000 miles. By buying the certified pre-owned car from a
dealer they provide a warranty that extends the manufacturer’s original
warranty. Used cars generally have a lower insurance premium compared to a new
car, while buying a new car may require the buyers to have full insurance
coverage but in used cars, buyers spend less on insurance if they’re paying
cash for a used car. These all features are increasing the demand for the used car
across the globe in many countries.
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The global used car market has been segmented based on vehicle type, by propulsion
type, and by sales channel, end-use, by region. In
terms of vehicle type, the global used car market is segmented into sedan,
SUV/MPV, and hatchback. Owing to the cost-effectiveness of used cars compared
to new cars, the demand for the used car has increased in the past few years.
In this segment, the sedan has the largest market share of 35.12% in 2021 and the SUV/MPV segment is
anticipated to maintain its dominance and reach 38.34% market share by 2027. SUV
has various benefits over the other segment as it has a drivetrain option, SUV
has easier gotten in and out option as it is very spacious. The SUV/MPV share
is experiencing a growing trend and is anticipated to be the fastest-growing
segment during the forecast years advancing at a CAGR of 9.64%.
In terms of propulsion type, the global used car market is segmented
into internal combustion engines and electric. Over time, the sales of electric
vehicles have increased in many countries, governments are taking steps to
increase the number of electric vehicles in the country as electric vehicles
are more ecofriendly and emit very fewer amounts of pollutants compared to
Internal combustion engines vehicles. In the global used car market, the
electric car segment accounts for a very less share of 4.65% whereas the internal
combustion engine has a market share of 95.35% in the year 2021. Internal
combustion engine-based vehicles have the largest market share in the global
used car market because in many countries electric vehicles have been recently
introduced and are not very popular yet among the buyers. In many countries,
the charging infrastructure is not available in many cities due to which
drivers face difficulties in charging the electric car. Due to all these drawbacks
buyers prefer internal combustion engine-based cars. Owing to this, the internal
combustion engine has the largest market share in the propulsion segment.
In sales channel, the global used car market is segmented into offline
and online. In most of the country people prefer to buy car offline as they
examine everything personally and have trust issues for buying a car online. In
the past few years online, shopping has come as an acceptance among the people
and buying goods by using online application is easier compared to buying
offline. In many countries there are various online platforms which provide
used cars easily. One can find a used car easily by using various online
platforms. The share of offline segment is 10.8% whereas online segment has
89.92% in 2021 in the global used car market. The online segment is expected to
grow in the coming up years and has a market share of 14.67% in 2027. Buying a
car offline is a very usual trend among the buyers in almost every country, as
they prefer to take test drives and they prefer to see personally all the features
of the car which they are going to buy. Buying a car online does not provide
many options to buyers such as personally seeing the cars and taking the test
drive due to which many buyers prefer to buy cars offline. During the forecast
period, the online segment is expected to grow as the use of internet has
increased which is helping the buyers to buy cars from various places.
As a measure to counter the spread of the COVID-19 pandemic, many
countries across the globe imposed lockdowns in the second and third quarters
of 2020 due to which the sales of new cars went down. However, the demand for
used cars increased as they were easily available in the market and were
cheaper compared to new cars. The used car sales increased by 20-30% after lockdown
restrictions were eased. Another factor which led to an increase in demand for
used cars is that due to COVID-19, many people avoid traveling by public
transport and prefer to have a personal vehicle. Another reason that has increased
the sales of used cars is digitalization as many start-ups are offering used
cars at the best price and buyers are getting different options and car of
their own choice easily.
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Some of the major companies
operating in the global used car market are CarMax, Inc, AutoNation, Inc,
Hendrick Automotive Group (North Carolina, U.S.), Penske Automotive Group, Inc,
Arnold Clark Automobiles Limited, Asbury Automotive Group, Mahindra First
Choice Wheels, Lithia Motors Inc., TrueCar, Inc (California, U.S), CarGurus,
Inc. Apart
from these companies, local unorganized car dealers are also increasing their marketing
activities and enriching their product portfolio in many countries to increase
their customer outreach.
“In 2021, Asia-Pacific accounted for the largest share i.e., 28.95% in the
global used car market. Europe region is expected to maintain its dominance
over the next five years with a market share of 27.33%. There are many benefits
of having a used car such as cost-effectiveness, fewer taxes, lesser paperwork,
low depreciation, etc., said Mr. Karan Chechi, Research Director with TechSci
Research, a research-based global management consulting firm.
“Global Used Car Market By
Vehicle Type (Sedan, SUV/MPV, Hatchback), By Propulsion Type (Internal
Combustion Engine, Electric), By Sales Channel, By End Use, By Region, By Company
(2021), Forecast & Opportunities, 2017- 2027F, has
evaluated the future growth potential of global used car market and provides
statistics & information on market size, structure, and future market
growth. The report intends to provide cutting-edge market intelligence and help
decision makers take sound investment decisions. Besides, the report also
identifies and analyzes the emerging trends along with essential drivers,
challenges, and opportunities in global used car market.
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