Global Used Car Market to Generate 1,729.82 Billion by 2028 All Credit Goes to Growing Number of Online Start-ups and their Innovative Approach to Target Buyers
June 23, 2022
Current used car market is valued at US$ 928.24 billion in 2021 and is projected to grow at a CAGR of 9.3% until 2028 due to increasing interest of buyers to save money, take advantage of lower interest rate, increased number of start-ups offering lucrative opportunities to buy cars in mint conditions with added warranty.
/EIN News/ -- Westford, USA, June 23, 2022 (GLOBE NEWSWIRE) -- Cars are one of the most popular products bought and sold in the world. Used cars, on the other hand, are becoming increasingly popular as buyers look for value for their money. This is good news for businesses that sell used cars - and it could mean big profits in the future. The increasing demand for used cars is a result of a number of factors. Some people are switching to used cars because they want to save money, others are worried about the environmental impact of new cars, and still others are looking for a more personalized experience. Whatever the reason, the used car market is booming and there's no sign of it slowing down any time soon.
The used car market is experiencing a resurgence in demand, as more and more people are switching to electric vehicles. This is due to the fact that electric cars are not only environmentally friendly, but they also offer better safety features. In addition, the cost of an electric car has been decreasing over time, making them an even more appealing option for those looking for a new vehicle.
Currently more than 288 million cars are present in the US. As per SkyQuest Technology Consulting, more than 39 million used cars were sold in 2020 with average price of around US$ 24,350. In just one year, the average price of used car price has gone up by 30% thanks to ongoing shortage in semiconductor chip. On the other hand, UK is the world most lucrative used car market as more than 21 million used cars were sold in the second quarter of 2021 in the country. The European market has witnessed around 8% growth in the overall market sales since 2019 due to several factors like covid pandemic, shortage of new cars, and long waiting period for delivery, among others. It has been observed that most of consumers around the globe preferred buying cars that are between 3–5 years old. This is especially true for North America and Europe. On the other hand, price sensitive market like India and China, people preferred buying cars that are 5-8 years old.
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Low Interest Rates and People's Desire to Save Money Making the Used Cars Look Attractive Buying Options
The used car market is booming, and for good reason. It's a great way to save money on a car without having to take on a lot of debt. One of the biggest factors positively affecting the used car market price is lowers interest rates. The average interest rate on new cars is around 6%. However, rates on used cars can be as low as 1% in some part of Europe.
One reason why the used car market is doing so well is because people are wanting to buy cars that are less expensive than new cars. In fact, many people are looking for cars that they can buy for less than $10,000. Most of the people find the used car market value attractive and they can also make some saving without taking much efforts.
Increasing Number of Used Cars Online Platforms and Easy Financing Driving Up Used Market Value
The used car market continues to grow with start-ups entering the market to provide consumers with more choices. The market has had a positive outlook for the past few years, with new car sales declining and the used car market projected to grow by 6% in 2022. One of the reasons for this growth is that consumers are looking for more options when it comes to buying a car. There are many different types of used cars available, from luxury models to economy cars, and each has its own set of benefits and drawbacks.
One of the ways start-ups are capitalizing on used car market in 2022 is through online platforms. These platforms allow consumers to compare different models and prices, making it easier than ever to find the perfect car. Additionally, these platforms often offer financing options that make it easy for consumers to buy a car without having to go through a dealership.
PumpPumPum, a used car leasing company, has recently raised $2 million in funding. The money will be used to grow the company and help it become India’s largest mobility leasing platform. The company will be using the funds for accelerated expansion and fulfilling its vision of becoming India’s largest mobility leasing platform. Through their system, customer-first approach, and service for insurance and servicing, the company has achieved 1000% growth in just 2 years. They are currently only located in two cities but manage over 55.
Cazoo, Europe's leading online used car retailer, launched in Italy. They provide better selection, value, peace of mind, and convenience when buying a car in Italy. Cazoo’s plans for growth in Europe have been helped by the acquisition of the Italian company, brumbrum. They are planning to develop new offers, systems, and easily accessible services. As well as owning and reconditioning its cars to the highest standard before offering them for delivery in just a few days, Cazoo has hundreds of cars available in Italy. With customers able to purchase a car entirely online and have it delivered directly to their door, Cazoo has been referred to as the ‘Amazon of the used car market’.
Overall, the used car market is expected to continue growing in 2020 due to consumer demand for more options and start-ups providing innovative solutions that make buying a car easier than ever before.
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Growing Adoption of EV Intensified Used Car Market
According to a study by the National Renewable Energy Laboratory, the used electric car market could be worth as much as $180 billion by 2040. This is because people are increasingly choosing to buy electric vehicles, not only because of the environmental benefits, but also because they're cheaper to operate than traditional gasoline or diesel cars. The big challenge for startups in the used electric car market is that there's already a lot of competition. Tesla Motors is the biggest player in this space, but it's not the only company with a presence. There are also several smaller startups that are trying to carve out their own niche.
Tesla is one of the most popular car companies in the world. They have a strong following of fans who love their electric cars. Tesla has always been a company that sells its cars new, but they also sell used cars. The used EV car market is a huge opportunity for Tesla. The company is able to sell used EV cars more promptly than any other players because their attractive valuation, strong consumer base, and promise on quality of their used cars.
Overall, Tesla is doing very well in the used car market. They have managed to keep their fan base intact despite selling used cars, and they are able to make a lot of money on the resale value of their cars.
Swedish company Carla seeks to differentiate themselves from competitors by allowing only full-electric and plug-in hybrids on their platform. Recently, the company secured an additional 19 million euros (20 million dollars) in funding from investors to increase their presence in used market and achieve highest possible market growth. Customers can buy a vehicle in as little as 72 hours, knowing that the battery has been tested and inspected beforehand. It is also able to guarantee the car with 12-month warranty and also provide financing options.
Shortage In Semiconductors Delayed Delivery of New Cars, but added fuel to Used Car Market
In the first half of 2020, auto sales declined. And even though new-vehicle sales grew in the second half of the year, uncertainty meant automakers couldn’t increase their semiconductor orders. At the same time, consumer demand for personal computers, servers and equipment for wired communications rose because they all use semiconductors which is a result of increased remote work. This means that while auto sales drastically cut chip orders, other sectors faced an increased need because they’re more reliant on chips used in semiconductors. This has dramatically increased the demand for used cars as consumers were not able to get timely delivery of their cars. In addition to this, most of the manufacturers witnessed a strong recovery in the demand, which piled up over few months, creasing huge gap between demand and supply. As a result, most of the buyers across the globe started looking for other alternatives such as used car.
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Women are Emerging as the Potential Consumers of Used Cars in India
Spinny, an Indian car retailing platform, has observed a 32% growth in the demand for used cars by women consumers in 2021. This is because and there is increased independence and usually they prefer to drive themselves than use public transportation. Moreover, Spinny also observes that most women are aged between 30-40 years of age and want cars which are automatic and petrol variants. The Indian used car market has seen increased interest from the less advantaged people from tier 2 markets. It has been observed that the country's most popular cities such as Bangalore, Hyderabad, and Delhi NCR. Wherein, women are found majorly preferring Hyundai i20, Tata Nexon, Maruti Baleno, Maruti Swift and Renault Kwid.
Increased Focus on Safety, Making Used Car Less Appealing to Buyers Who Want to Save Money on Repairs and Maintenance Costs
The used car market is expected to see a decline in sales due to stricter government regulations about passenger safety. This will challenge the growth of the market as buyers are now more cautious about what they buy. Safety concerns have increased significantly in recent years to growing prevalence of road accidents, increasing number of people losing their lives due to lack of air bags or other safety gears. Regulations such as those implemented in the US have forced car manufacturers to install more robust safety features in their vehicles. This has resulted in used cars being more expensive, and buyers may be less likely to purchase them. Apart from this, most of the countries in Asia Pacific and Latin America, especially in India, Brazil, China, and Argentina have large stock of used cars that lacks basic safety features like airbags. As a result, buyers that focused majorly on safety aspect are likely to deter from used cars even their market value looks attractive.
Top Players in Used Car Market
Group 1 Automotive Inc. (US)
Asbury Automotive Group (US)
AutoNation Inc. (US)
CarMax Business Services, LLC (US)
Cox Automotive (US)
eBay Inc. (US)
Hendrick Automotive Group (US)
LITHIA Motor Inc. (US)
Scout24 AG (Germany)
TrueCar, Inc. (US)
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