Used Car Market to Grow by USD 857.1 Billion from 2024-2028, as New Model Launches Drive Revenue with AI-Powered Market Evolution - Technavio

NEW YORK, Nov. 8, 2024 /PRNewswire/ -- Report on how AI is driving market transformation - The global used car market size is estimated to grow by USD 857.1 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of almost 7.56% during the forecast period. Increasing number of new models of cars launched due to high competition is driving market growth, with a trend towards growing demand for car subscription services. However, increasing demand for car-sharing services poses a challenge. Key market players include Alibaba Group Holding Ltd., Asbury Automotive Group Inc., AutoNation Inc., Autotrader.com Inc., Berman Auto Group, CarGurus Inc., CarMax Inc., Cars24 Services Pvt. Ltd., DriveTime Automotive Group Inc., eBay Inc., Group 1 Automotive Inc., Hendrick Automotive Group, Hertz Global Holdings Inc., Lithia Motors Inc., Mahindra and Mahindra Ltd., Penske Corp., Scout24 AG, Sonic Automotive Inc., Toyota Motor Corp., and TrueCar Inc..

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Key Market Trends Fueling Growth

The used car market is witnessing significant trends as consumers prioritize fuel-efficient and eco-friendly vehicles, reducing their carbon footprint. Aging vehicle fleets and the increasing demand for safety features and durability are driving the demand for modern used vehicles. Online platforms and e-commerce websites are transforming the buying process, offering diverse consumer bases access to inventory, prices, and vehicle histories through mobile apps and digital verification. Regulatory changes and environmental concerns are shaping the future outlook, with a focus on reliability and advanced technologies such as adaptive cruise control, lane-keeping assistance, and infotainment systems. Trust and transparency are key factors, with eco-friendly vehicles, including hybrid and electric cars, gaining popularity due to fuel prices, greenhouse gas emissions, and air pollution concerns. Affordability and personal mobility remain top priorities for price-sensitive buyers, with accessible financing options, competitive interest rates, and flexible packages available from OEMs, banks, NBFCs, dealers, and insurance companies. The market encompasses a diverse range of vehicle types, fuel types, sales channels, and vendor types, catering to the needs of hatchbacks, sedans, sports utility vehicles, luxury vehicles, and more. Online players, including auto marketplaces and organized dealership networks, are expanding their presence, offering virtual vehicle inspections and eco-friendly vehicles to meet the evolving demands of customers. The used car market continues to evolve, adapting to the changing landscape of personal transportation and consumer preferences. 

Car subscription services offer a flexible alternative to car ownership or leasing. With these services, consumers pay a monthly fee that covers roadside assistance, insurance, and maintenance. Subscribers can switch between different car models at short notice, providing the convenience of driving various vehicles for different occasions. Some services cater to the luxury car market, while others offer long-term rentals with weekly or monthly car changes. Used cars are also available for short-term subscriptions. These services provide an affordable and hassle-free solution for those seeking access to a diverse range of vehicles. 

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Market Challenges

• The used car market faces several challenges in today's business landscape. With increasing focus on fuel efficiency and eco-friendliness, the demand for used vehicles with low carbon footprints is growing. Aging vehicle fleets call for safety features and durability in modern used cars. The diverse consumer base, including price-sensitive buyers, seeks reliable and affordable personal transportation options. Online platforms and e-commerce sites are transforming the buying process, offering convenience and accessibility. Regulatory changes and environmental concerns are driving the shift towards eco-friendly vehicles, such as hybrids and electric cars. Reliability and trust are crucial factors in the used car market. Vehicle histories, mobile apps, and advanced imaging technologies facilitate informed buying decisions. Online sales channels, including auto marketplaces, are gaining popularity due to their accessibility and symmetry of information. Affordability, consumer loyalty, and brand play a significant role in the used car market. The market caters to various vehicle types, fuel types, sales channels, and vendor types, including OEMs, banks, NBFCs, dealers, and insurance companies. The future outlook of the used car market is promising, with fast-charging infrastructure, accessible financing options, and competitive interest rates shaping the landscape. Adaptive cruise control, lane-keeping assistance, and infotainment systems are becoming essential features in used vehicles. Price-sensitive buyers, age groups, and overhead costs influence the market dynamics. Virtual reality and online sales channels, such as those offered by Ebay Inc. And organized dealership networks, are revolutionizing the used car buying experience. Franchise dealers, OEM involvement, and retail models are key players in the market, catering to the needs of luxury vehicle buyers and budget-conscious consumers alike.
• The used car market is experiencing a shift due to changing consumer preferences and economic factors. Many individuals are delaying car purchases due to rising fuel prices and the availability of affordable alternatives, such as car-sharing services. In China, the utilization rate of privately owned cars is estimated to be as low as 7%, while car-sharing vehicles are used up to 60% of the time. This efficient use of resources, combined with shared maintenance costs, makes car-sharing an attractive option for those seeking affordable and flexible mobility solutions. Additionally, domestic taxi rates in China remain relatively low compared to developed countries, further reducing the incentive for car ownership.

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Segment Overview 

This used car market report extensively covers market segmentation by

1. Vehicle Type
• 1.1 Compact car
• 1.2 SUV
• 1.3 Mid size
2. Channel 
• 2.1 Organized
• 2.2 Unorganized
3. Geography 
• 3.1 APAC
• 3.2 North America
• 3.3 Europe
• 3.4 Middle East and Africa
• 3.5 South America

1.1 Compact car- The compact car segment is a significant contributor to the global used car market, with APAC and Europe leading the charge. This segment's growth is driven by the increasing specifications of compact cars and the rising demand for personal mobility. Compact cars, which fall between subcompact and mid-size vehicles, are popular due to their fuel efficiency and low emissions. These factors save consumers money on annual taxes and contribute to reducing harmful gas emissions. In Europe, the Fiat Panda and Volkswagen Golf are popular used compact cars. India is another major market for used compact cars, with the Alto and Wagon R from Maruti Suzuki being top choices. However, the Indian government's plan to reduce the additional levy on hybrid cars may negatively impact the demand for used compact cars. Despite this challenge, the compact car segment is expected to expand, contributing to the growth of the global used car market.

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Research Analysis

The used car market is a thriving industry that caters to the diverse needs of consumers seeking personal transportation solutions. Modern used vehicles offer safety features like adaptive cruise control and lane-keeping assistance, ensuring a secure driving experience. Durability and reliability are key considerations for buyers, making used cars an attractive option for those looking for value. Online platforms and e-commerce sites have revolutionized the buying process, allowing consumers to browse inventory, check vehicle histories, and complete transactions from the comfort of their homes. Industry applications include fleet management, car rental services, and leasing companies. Environmental concerns have also influenced the used car market, with an increasing demand for fuel-efficient and eco-friendly vehicles. Advanced imaging technologies and mobile apps provide buyers with a more transparent and trustworthy purchasing experience, offering vehicle history reports and real-time inventory updates. Infotainment systems and price comparisons are essential features for tech-savvy consumers, while trust and affordability remain the primary drivers for many buyers in the market. The used car market continues to evolve, offering a wide range of options for consumers seeking reliable and cost-effective personal transportation solutions.

Market Research Overview

The used car market is a diverse and dynamic sector, catering to the personal transportation needs of a wide consumer base. With growing environmental concerns, the focus is shifting towards fuel-efficient and eco-friendly vehicles, reducing carbon footprint and minimizing air pollution. Aging vehicle fleets are being replaced with modern cars, offering advanced safety features, durability, and reliability. Online platforms and e-commerce sites are revolutionizing the buying process, providing access to inventory, prices, and vehicle histories at the click of a button. Regulatory changes and technological advancements are shaping the future outlook of the used car market. Modern vehicles come equipped with features like adaptive cruise control, lane-keeping assistance, infotainment systems, and vehicle history reports, instilling trust among buyers. Mobile apps, online applications, and digital verification are making transactions seamless and convenient. The market offers a diverse range of vehicles, from hatchbacks and sedans to sports utility vehicles, catering to various fuel types, sales channels, and vendor types. Eco-friendly vehicles, such as hybrid and electric cars, are gaining popularity due to their reduced greenhouse gas emissions and lower fuel prices. Online players like Ebay Inc. And auto marketplaces are disrupting traditional sales channels, offering accessible financing options, competitive interest rates, and flexible financing packages. The used car market is a complex ecosystem, involving OEMs, banks, NBFCs, dealers, insurance companies, and various sales channels, catering to the affordability and personal mobility needs of consumers, regardless of age groups and budget constraints.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Vehicle Type
• Compact Car
• SUV
• Mid Size
• Channel
• Organized
• Unorganized
• Geography
• APAC
• North America
• Europe
• Middle East And Africa
• South America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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SOURCE Technavio