Comprehensive Snapshot for India Used Car Market Including Segment Analysis in Brief.
Industry: Automotive & Transportation
Published Date: April-2025
Format: PPT*, PDF, EXCEL
Delivery Timelines: Contact Sales
Number of Pages: 140
Report ID: PMRREP35243
The India used car market size is projected to rise from US$ 32.9 Bn in 2025 to US$ 90.2 Bn by 2032. It is anticipated to witness a CAGR of 15.5% during the forecast period from 2025 to 2032.
Easy availability of several types of finance options and rising preference of the younger demographics for individual mobility are poised to bolster used car demand in India. The surging middle-class population in the country is also seeking alternatives to new cars as these are relatively low-cost. Several local pre-owned car providers are focusing on offering transaction simplicity, convenience, and transparency to attract more customers.
Key Industry Highlights
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Market Attribute |
Key Insights |
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India Used Car Market Size (2025E) |
US$ 32.9 Bn |
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Market Value Forecast (2032F) |
US$ 90.2 Bn |
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Projected Growth (CAGR 2025 to 2032) |
15.5% |
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Historical Market Growth (CAGR 2019 to 2024) |
13.3% |
The affordability gap between used and new cars in India has broadened in recent years. As per a new report, in 2024, the Average Selling Price (ASP) of used cars in the country surged by 24%, while new cars saw a 32% hike. This variation is estimated to make used cars a more economical option for several buyers. New cars have become expensive due to constant regulatory changes, including safety standards. These require the inclusion of innovative features such as airbags and anti-lock braking systems, adding to the manufacturing cost.
In early 2025, renowned automotive manufacturers such as Mahindra, Tata Motors, Hyundai, and Maruti Suzuki rolled out price hikes ranging from 2% to 4% owing to supply chain issues and high input costs. These factors have encouraged used car providers to extend their financing segments, with financing penetration rising to 23% in 2024, finds a study. This growth is further augmented by collaborations between financial institutions and online platforms. OLX, for example, recently joined hands with IDFC FIRST Bank to optimize the financing process for used car buyers.
The used car field in India is predicted to exhibit a slowdown in the foreseeable future as the Goods and Services Tax (GST) Council planned to surge the tax rate of these cars to 18% from 12%. In December 2024, the Council announced the hike on tax rates on all used cars, including electric vehicles. Only cars purchased by businesses and those that reflect a supplier’s margin are subject to the updated tax rates.
Since other components are already subject to hefty taxes, the increased rates will be especially burdensome. Used cars are considered the backbone of mobility of millions of people in the country, specifically in rural areas and tier 2 or 3 cities. The new GST is anticipated to hamper the market’s growth trajectory to a certain extent.
Leading companies in the market are speculated to gain new opportunities with developments in the Certified Pre-Owned (CPO) car segment. Demand for certified pre-owned cars will likely skyrocket due to increased desire for quality apart from value for money. Certified pre-owned cars often come with warranties and undergo stringent inspections, addressing various quality concerns effectively.
Key companies such as CARS24 have already capitalized on this trend by providing a wide range of certified pre-owned cars. The company offers a vast inventory of certified used cars in India, meeting the high demand for quality used cars.
Based on vehicle type, the market is trifurcated into hatchbacks, sedans, and sports utility vehicles (SUVs). Among these, hatchbacks are projected to account for a share of nearly 38.6% in 2025, finds Persistence Market Research. These vehicles are more affordable compared to SUVs and sedans, both on the basis of maintenance costs and initial purchase. This factor is envisioned to make used hatchbacks an ideal option for budget-conscious customers, mainly first-time car owners.
Used sedans, on the other hand, are projected to showcase decent growth through 2032. These provide a unique balance between the spaciousness of SUVs and the compactness of hatchbacks, making them well-suited for urban environments. Their efficient fuel consumption and comfortable interiors further cater to the requirements of city dwellers looking for reliable transportation.
In terms of fuel type, the market is bifurcated into petrol and diesel. Out of these, the petrol segment will likely dominate by holding 57.1% of India used car market share in 2025. Used petrol cars provide a budget-friendly option compared to their diesel counterparts. These have relatively lower emission levels of particulate matter and nitrogen oxides. This environmental benefit is projected to attract eco-conscious customers looking for sustainable transportation options.
Used diesel cars, on the other hand, are poised to exhibit average growth in the forecast period. Diesel engines are known to offer superior fuel efficiency. Models such as Honda Amaze and Tata Altroz, for example, provide Automotive Research Association of India (ARAI)-certified mileage figures of up to 25 km/l. This high efficiency will likely make used diesel cars an ideal option for those living in areas with restricted access to cost-effective fuel alternatives as well as for long-distance commuters.
In North India, Haryana, Uttar Pradesh, and Delhi are estimated to remain at the forefront of growth through 2032. The rise of several online platforms is expected to change the way used cars were once purchased in the region. These platforms offer smooth purchasing experiences with doorstep delivery, vehicle history reports, and transparent pricing. These have also extended financing options, making used cars easily accessible to a wide population segment.
In rural parts of North India, used diesel cars are presumed to be a popular choice due to their better suitability for long distances and rough terrains as well as more mileage. Mahindra Scorpio and Toyota Innova have gained momentum in these areas, specifically among businesses and families. Used electric vehicles are also seeing high demand in urban areas as government agencies offer incentives to increase sustainability.
States such as Gujarat and Maharashtra are assessed to outpace the others in West India through 2032. Easy availability of cost-effective financing options, rising middle class, and surging urban mobility are expected to drive demand across cities including Surat, Ahmedabad, Pune, and Mumbai. The preference for used hatchbacks and sedans is relatively high in the aforementioned cities, with models such as Hyundai i20, Honda City, and Maruti Suzuki Swift gaining traction.
The vehicles are mainly preferred owing to their superior suitability, reliability, and fuel efficiency for urban commuting. Demand for luxury pre-owned cars and SUVs is also rising as modern buyers look for premium options at affordable prices. However, lack of standardization in vehicle documentation and inspections is estimated to hamper growth in a few parts of West India, thereby resulting in consumer apprehensions.
East India is poised to hold a share of around 24.8% in 2025. The region is dominated by cities such as Guwahati, Bhubaneswar, and Kolkata. The rising number of young professionals in these cities is gradually creating a high demand for reliable and cost-effective transportation options. This demographic is hence spurring sales of used cars in East India. According to a latest study, Kolkata accounted for 15 to 20% of all used car sales in the region as of 2023. More than 50% of transactions occurred in the affordable car segment.
Increasing preference of millennials for personal vehicles over public transportation and rising number of nuclear families across East India are further driving the market. States such as Odisha, Bihar, and Jharkhand are showcasing a surging demand for used diesel cars as inter-city travel is becoming increasingly common. The emergence of small-scale local dealers in these states is also creating lucrative opportunities. These dealers are offering custom financing options according to the specific requirements of buyers.
India used car market has recently become competitive with the emergence of several large- and medium-sized companies. They are focusing on extending their geographic presence across the country by developing new pre-owned car retail outlets. A few other companies are aiming to offer superior after-sales services to attract a large customer base.
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Report Attribute |
Details |
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Historical Data/Actuals |
2019 - 2024 |
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Forecast Period |
2025 - 2032 |
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Market Analysis Units |
Value: US$ Bn/Mn, Volume: As Applicable |
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Geographical Coverage |
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Segmental Coverage |
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Competitive Analysis |
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Report Highlights |
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Customization and Pricing |
Available upon request |
By Vehicle Type
By Vendor Type
By Fuel Type
By Region
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The India used car market is projected to be valued at US$ 32.9 Bn in 2025.
The emergence of local dealers and increasing preference for individual mobility are the key market drivers.
The market is poised to witness a CAGR of 15.5% from 2025 to 2032.
Shift toward transparent price models and high demand for customized financing options are the key market opportunities.
CARS24, Maruti True Value, and Mahindra First Choice Wheels are a few key players.
