Used Car Market Size, Share & Trend Analysis Report By Vehicle Type (Hybrid, Conventional, Electric), By Vendor Type, By Fuel Type, By Size, By Sales Channel, By Region- Global Industry Analysis, Share, Growth, Regional Outlook and Forecasts, 2024-2033

The global used car market size was exhibited at USD 1.67 trillion in 2023 and is projected to hit around USD 3.05 trillion by 2033, growing at a CAGR of 6.2% during the forecast period of 2024 to 2033.

Key Takeaways:

• North America dominated the market,with the largest revenue share of 36.0% in 2023.
• The organized segment dominated the market with the highest revenue share of 75.0% in 2023.
• The conventional segment accounted for the largest revenue share of over 42.8%.
• The petrol segment held the largest market share of 42.5% in 2023.
• The SUV segment accounted for the largest market share of 37.6% of the market in 2023.
• The offline segment held a considerable market share of 74.8% in 2023.

Used Car Market by Overview

The used car market is a dynamic and robust sector that plays a pivotal role in the automotive industry. As consumers increasingly recognize the value and cost-effectiveness of purchasing pre-owned vehicles, the demand for used cars has seen a significant uptick in recent years.

Used Car Market Growth

The growth of the used car market is propelled by several key factors. Primarily, the allure of cost savings significantly attracts consumers, as purchasing a used car often offers substantial financial advantages compared to buying new. This economic benefit is complemented by the wide variety of options available in the used car market, allowing buyers to find vehicles that align with their specific needs and budgets. The improved longevity of modern vehicles, coupled with meticulous maintenance practices, further reassures consumers about the reliability of used cars. The rise of certified pre-owned programs, incorporating thorough inspections and extended warranties, has also bolstered consumer confidence. Additionally, the digital transformation has played a pivotal role, with online platforms providing a convenient avenue for buyers and sellers to connect, expanding the market's accessibility. As the industry addresses challenges such as transparency and comprehensive vehicle history reporting, the used car market is poised for continued growth, sustained by a blend of economic practicality, diverse options, and technological advancements.

Used Car Market Report Scope

Used Car Market Dynamics

The dynamics of the used car market are intricately shaped by two primary factors: economic realities and technological advancements. Firstly, economic realities play a pivotal role as consumers increasingly prioritize cost-effectiveness. The depreciation of new cars in their initial years makes used cars an attractive option, allowing buyers to acquire reliable vehicles at a fraction of the cost. This economic incentive is further accentuated by the variety of options available in the used car market, catering to diverse budgetary considerations and preferences.

Secondly, technological advancements significantly influence market dynamics, enhancing the overall customer experience. The rise of online platforms has revolutionized how buyers and sellers interact, providing a convenient and transparent marketplace. Additionally, innovations in vehicle manufacturing contribute to the extended longevity of used cars, ensuring they remain reliable and technologically competitive. Features such as advanced safety systems, connectivity options, and fuel efficiency are increasingly becoming key drivers in the decision-making process for used car buyers.

Used Car Market Restraint

Two notable restraints impacting the used car market are concerns about transparency and the need for comprehensive vehicle history reporting. Firstly, concerns about transparency pose a significant challenge. Buyers often face uncertainties regarding the accurate representation of a used vehicle's condition, mileage, and maintenance history. This lack of transparency can erode consumer trust, hindering the overall growth of the market. Addressing these concerns through standardized practices and regulations is essential to alleviating apprehensions among potential buyers.

Secondly, the need for comprehensive vehicle history reporting is a critical restraint. Inconsistent or incomplete information about a used car's history, including accidents, repairs, or title issues, can impede buyer confidence. To overcome this restraint, the industry needs to adopt and promote comprehensive reporting standards. Robust vehicle history reports, detailing the complete background of a used car, can enhance transparency and facilitate more informed purchasing decisions.

Used Car Market Opportunity

Two significant opportunities within the used car market include the embrace of online platforms and the growing demand for sustainable transportation. Firstly, the increasing reliance on online platforms presents a lucrative opportunity. The digital landscape has transformed how consumers buy and sell used cars, offering convenience, transparency, and a broader reach. Capitalizing on this trend through strategic investments in user-friendly online platforms and digital marketing initiatives can open up new avenues for market growth and customer engagement.

Secondly, there is a notable opportunity in cater to the growing demand for sustainable transportation. As environmental awareness rises, more consumers are seeking eco-friendly alternatives, including used electric or hybrid vehicles. Positioning the used car market as a viable option for sustainable transportation not only aligns with evolving consumer values but also expands the market to a segment of environmentally conscious buyers. Incorporating eco-friendly options and promoting sustainability in marketing strategies can tap into this growing demand and differentiate the used car market in a positive way.

Used Car Market Challenges

Two notable challenges confronting the used car market are fraud concerns and the impact of rapid technological evolution. Firstly, fraud concerns pose a significant challenge. The decentralized nature of the used car market, often involving individual sellers and varied inspection standards, can lead to instances of fraud. From misrepresented vehicle conditions to title discrepancies, these concerns undermine consumer trust. Implementing robust verification mechanisms, promoting standardized practices, and enhancing regulatory oversight can help mitigate the risks associated with fraud.

Secondly, the impact of rapid technological evolution presents a challenge for the used car market. As vehicles become more technologically advanced, there is a growing digital divide between newer models and their older counterparts. Buyers may encounter difficulties understanding and maintaining the technology embedded in used cars, impacting their overall satisfaction and confidence in the purchase. To address this challenge, the industry needs to invest in education and support systems, ensuring that both buyers and sellers are equipped to navigate the technological landscape of used vehicles effectively.

Segments Insights:

Vendor Type Insights

The organized segment dominated the market with the highest revenue share of 75.0% in 2023 and is projected to register the fastest CAGR of 7.1% over the forecast period. This is attributed to the increasing number of franchised dealers in the market. The entry of new players in the market and new retail models emerged as key factors in fueling the market's growth. According to the National Automobile Dealers Association (NADA), in the U.S., franchised dealers earned higher gross profits on used vehicle sales than independent dealers. In addition, the organized vendors benefited from greater consumer loyalty to the brand across all age groups. With many dealers across the globe, the market could be more cohesive. However, in developed countries such as the U.S., Germany, and the UK, some top dealers such as CarMax Business Services, LLC, and Asbury Automotive Group account for more than half of the volume share in the market.

The unorganized segment is expected to witness significant growth over the forecast period. Unorganized vendors often have lower overhead costs compared to established dealerships. It lets them offer used cars competitively, attracting price-sensitive buyers looking for good deals.

Regional Insights

North America dominated the market, with the largest revenue share of 36.0% in 2023. The used car market in North America offers a wide variety of vehicles, ranging from recent models with modern features to older classics. This diverse selection caters to different preferences and budgets, attracting more buyers.

The Asia Pacific is expected to grow at the fastest CAGR of 7.7% during the forecast period in terms of shipment, primarily due to the rapid growth of demand in China for used vehicles. Asia-Pacific will expand at the highest CAGR over the forecast period. It is attributed to increased used car sales in China, India, and other Asian countries. The North American region held a notable market share in 2021 and is expected to witness steady growth in the years to come owing to the plummeting growth in the past few years.

With the rising number of organized players with used car trading services in the Asia-Pacific region, China has expanded its market footprint in the Asian market. Some Indian car dealers provide a rich array of advanced technology-enabled tools, which include mobile-based applications, a virtual online showroom, cloud services for lead management systems, tracking sales performance, and digital marketing support. Moreover, this advancement in the Indian used car industry creates great opportunities for the consumer base. Within the region, Indonesia, Malaysia, South Korea, and other developing countries have shown significant potential for the market.

Vehicle Type Insights

The conventional segment accounted for the largest revenue share of over 42.8%. Conventional gasoline vehicles with a large inventory offer multiple choices at an affordable price. This segment of vehicles accounted for the maximum share in all sizes, including compact cars, mid-size cars, and SUV cars. Further, growing concerns over climate change and increasing pollution have created a great demand for a substitute for conventional gasoline vehicles. Hence, the market has registered significant growth driven by electric used cars.

The electric segment is projected to register the fastest CAGR of 7.2% over the forecast period. In the last few years, used electric vehicle prices have remained viable for consumers, which plays a significant driving factor for electric vehicle sales. According to the last few years' price analysis, used electric vehicles' prices have been lower than used hybrid vehicles. Electric vehicle traits, such as technology-driven performance in the luxury vehicle segment, provide a status symbol and support sustainability, thus creating significant demand for used EVs.

Fuel Type Insights

The petrol segment held the largest market share of 42.5% in 2023. This is attributed to the declining usage of diesel vehicles as the government discourages the purchase of used diesel vehicles. The other segment is expected to witness significant growth over the forecast period. In developing countries, CNG-powered vehicles have also shown a sustainable upsurge in used vehicle volume sales. Emission standards for positive ignition (gasoline, NG, LPG, and ethanol) and compression ignition (diesel) vehicles have become one of the reasons for the slump in sales of diesel vehicles. Moreover, excessive emissions of NOx by the diesel engine can be attributed to the decline in diesel engine vehicle sales and an increase in the substitute market. The gasoline-fueled car emission standard is less stringent compared to diesel-fueled passenger cars. Furthermore, gasoline cars with refined engines, decent fuel efficiency, and strong top-end performance have attracted a large consumer base in the last few years. They are expected to continue to do so in the coming years. In addition, increasing inventory for gasoline-based SUVs became one of the driving factors in the gasoline segment.

The other segment comprises CNG, LNG, and battery packs. The other segment is expected to witness the fastest CAGR of 7.6% over the forecast period. The CNG segment, which entails vehicles powered by compressed natural gas, has garnered increasing attention due to its perceived environmental advantages and cost-efficiency. With persistent sustainability considerations influencing consumer decisions, the market for pre-owned CNG-powered vehicles has distinctly established its market presence.

Size Insights

The SUV segment accounted for the largest market share of 37.6% of the market in 2023. With the changing landscape in the automotive market, the SUV segment has caused the downfall of other segments. Offering space and size while remaining compact compared to off-road vehicles, SUVs are considered ideal drives by buyers nowadays in various regions. The market's residual value for SUVs is higher, with great demand and a wider supply network. The European region has witnessed significant demand traction for the used SUV market.

The midsized segment is expected to register a fastest CAGR of 6.4% over the forecast period. This is attributed to people's preference for economical and compact-size vehicles. The franchised owners have preferred compact vehicles with a high production rate and huge inventory. Easy availability at affordable prices has fueled the demand for used compact vehicles in the last few years. However, with changing consumer preferences and advancements in SUVs, used SUVs have shown significant growth, which is expected to continue in the coming years.

The mid-sized segment is estimated to register the fastest CAGR of 6.4% over the forecast period. Mid-sized cars strike a balance between compact cars and larger sedans or SUVs. They are often considered practical and versatile vehicles that offer enough space for passengers and cargo while being relatively easy to maneuver and park. This appeals to many buyers looking for a well-rounded and functional daily driver.

The compact size segment is expected to register a significant CAGR over the forecast period. This is attributed to people's preference for economical and compact-size vehicles. The franchised owners have preferred compact vehicles with a high production rate and huge inventory. Easy availability with affordable prices has fueled the demand for used compact vehicles in the last few years. However, with changing consumer preferences and advancements in SUVs, the used SUVs have shown significant growth, which is expected to continue in the coming years.

Sales Channel Insights

The offline segment held a considerable market share of 74.8% in 2023.This is attributed to the consumer's preference for the conventional buying mode. However, the online sales channel segment is expected to grow significantly. The development of online tools for sellers and buyers has made the market more competitive. In addition, the online availability of information, including prices, reviews, and specifications, leads to significant growth by dealers.

The online segment is expected to register the fastest CAGR of 9.4% over the forecast period. Online dealers empower digitally savvy customers with complete end-to-end purchasing capabilities, unique delivery options, and extensive vehicle photos and data with search tools. With technically advanced tools integrated with artificial intelligence and machine learning technology, dealers are expanding their network and customer base. AI applications can evaluate the data stored in the dealer management system and aid in refining marketing and sales strategies by modifying the car buying experience. For instance, online sales channels such as Alibaba.com, eBay, CarMax, and mobile.de play a vital role in country-specific growth in the market by targeting the domestic customer base. Various online channels modify their platforms to offer seamless car selling and buying experiences. For instance, in December 2020, Asbury Automotive Group announced the launch of its end-to-end digital retailing solution called Clicklane to create a great used car online shopping experience.

Recent Developments

• 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.
• In August 2022, Lexus, a subsidiary of Toyota Motor Corporation, launched the Lexus Certified Program in the Indian market. This strategic move by Lexus is geared towards providing current Lexus vehicle owners the avenue to secure an elevated resale valuation for their automobiles. Moreover, the initiative aims to augment the accessibility and affordability of Lexus models for prospective customers. By implementing this certified program, Lexus aims to amplify customer contentment while bolstering the brand's prominence within the Indian automotive sector.

Some of the prominent players in the used car market include:

• Alibaba.com.
• CarMax Enterprise Services, LLC
• Asbury Automotive Group
• TrueCar, Inc.
• Scout24 SE
• Lithia Motor Inc.
• Group 1 Automotive, Inc.
• eBay.com
• Hendrick Automotive Group
• AutoNation.com

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2021 to 2033. For this study, Nova one advisor, Inc. has segmented the global used car market.

Vehicle Type

• Hybrid
• Conventional
• Electric

Vendor Type

• Organized
• Unorganized

Fuel Type

• Diesel
• Petrol
• Others

Size

• Compact Car
• Mid-Sized
• SUV

Sales Channel

• Offline
• Online

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa (MEA)