Global Used Car Market 2024–2033

Reports Description

As per the current market research conducted by CMI Team, the global Used Car market is expected to record a CAGR of 6.2% from 2023 to 2030. In 2023, the market size is projected to reach a valuation of US$ 1.82 Trillion. By 2030, the valuation is anticipated to reach US$ 2.72 Trillion.

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The used car market refers to the buying and selling of pre-owned or second-hand cars. It is an important segment of the overall automobile industry and offers an affordable option for those who are not able to buy a new car or prefer not to spend a large amount of money on a new vehicle.

The used car market includes various types of cars such as sedans, SUVs, hatchbacks, and luxury cars, and it has its own set of buyers and sellers. The market is influenced by factors such as the economy, consumer preferences, and the availability of financing options.

Used Car Market - Mergers and Acquisitions

There have been several mergers and acquisitions in the used car market in recent years as companies seek to expand their reach and consolidate their position in the industry. Some of the notable M&A deals in the used car market include:

• Carvana's acquisition of Car360: In 2018, online used car dealer Carvana acquired Car360, a start-up that specializes in creating 3D images and augmented reality models of cars, to enhance its online car buying experience.
• Cars24's acquisition of CarWale: In 2020, Indian used car marketplace Cars24 acquired CarWale, an online car classifieds platform, to expand its offerings and reach more customers in the competitive Indian market.
• Cox Automotive's acquisition of Dealertrack: In 2015, automotive services company Cox Automotive acquired Dealertrack, a provider of software solutions for automotive retailers and lenders, to expand its digital capabilities in the used car market.
• CarMax's acquisition of Edmunds: In 2021, used car retailer CarMax acquired Edmunds, an online car shopping and information platform, to enhance its digital offerings and provide customers with more information and transparency in the car buying process.

These mergers and acquisitions are indicative of the growing competition and consolidation in the used car market as companies look to innovate and improve their offerings to attract more customers.

Used Car Market - Significant Opportunities

The used car market presents significant opportunities for buyers, sellers, and investors alike. Here are some of the main reasons why:

Lower Prices: Used cars are generally much cheaper than new cars, often costing thousands of dollars less. This makes them a great option for budget-conscious consumers who still want a reliable vehicle.

1. Greater Variety: The used car market offers a much wider range of vehicles than the new car market, with a vast selection of makes, models, and years available. This allows buyers to find the exact car they want, often at a better price than buying a new one.
2. Reduced Depreciation: New cars can lose up to 20% of their value as soon as they are driven off the lot, and continue to depreciate rapidly in the first few years. Used cars, on the other hand, have already experienced this initial depreciation, meaning that they hold their value better over time.
3. Increased Access to Financing: Many lenders offer financing for used cars, which can make it easier for buyers to afford the car they want.
4. Strong Demand: The used car market is consistently strong, with many buyers preferring to purchase a used car over a new one. This ensures that there is always a market for used cars, which is good news for sellers and investors.
5. Environmentally Friendly: Buying a used car is a more sustainable choice than buying a new car. When a car is manufactured, it consumes significant resources, including energy and raw materials. By purchasing a used car, you can help reduce the environmental impact of car production.

Overall, the used car market presents significant opportunities for anyone looking to buy or sell a vehicle, or for investors looking to make a profit in the automotive industry.

COMPARATIVE ANALYSIS OF THE RELATED MARKET

Used Car Market - Significant Threats

While the used car market does offer significant opportunities, there are also several significant threats to consider:

• Quality Concerns: Used cars may have a history of accidents, wear and tear, and other issues that can affect their performance and reliability. Buyers must be diligent in inspecting used cars and verifying their condition before making a purchase.
• Warranty Limitations: Many used cars are sold "as-is," meaning that buyers are responsible for any repairs or maintenance needed after the sale. This can be a significant risk for buyers who may encounter unexpected issues with their used car.
• Competition from New Cars: While the used car market offers lower prices and greater variety, new cars can still be a strong competitor, particularly for buyers who prioritize having the latest technology and safety features.
• Economic Downturns: In times of economic uncertainty, consumers may delay or cancel purchasing a car altogether, reducing demand in the used car market.
• Changes in Regulations: Changes in regulations or policies related to the automotive industry can significantly impact the used car market, such as restrictions on emissions or safety requirements that may render certain models obsolete.
• Disruptive Technologies: Advancements in technology, such as self-driving cars, may disrupt the traditional automotive industry, potentially reducing demand for used cars.

Overall, while the used car market offers significant opportunities, it is important to be aware of the potential threats and risks involved in buying or selling used cars.

Report Scope

Category-Wise Insights

Vehicle Type Insights

In 2022, the conventional vehicle segment had the largest share, accounting for over 42% of shipments. However, the electric vehicle segment is expected to grow rapidly, supported by the hybrid vehicle segment, with a significant compound annual growth rate (CAGR) projected over the forecast period. The affordability of used electric vehicles compared to used hybrid vehicles has been a driving factor for the increasing sales of electric vehicles in recent years. Additionally, the technology-driven performance and sustainability aspects of electric vehicles have increased their demand, particularly in the luxury vehicle segment.

Conversely, the conventional gasoline vehicle segment offers affordable options with a wide range of choices, with maximum shares in all sizes including compact cars, mid-size, and SUVs. Nevertheless, concerns about climate change and pollution have led to an increasing demand for alternative options to conventional gasoline vehicles, leading to significant growth in the market for used electric cars.

Vendor Type Insights

The organized vendor segment dominated the used car market in 2022, with a volume share of over 72%. This was primarily due to the increasing number of franchised dealers, along with the entry of new players and retail models. According to the National Automobile Dealers Association (NADA), franchised dealers in the U.S. earned higher gross profits on used vehicle sales compared to independent dealers. Furthermore, brand loyalty across all age groups also contributed to the growth of organized vendors.

The organized vendor segment is expected to maintain its dominance in the market and witness high growth over the forecast period, accounting for more than two-thirds of the market. Although the used car market is highly fragmented with numerous dealers worldwide, developed countries such as the U.S., Germany, and the U.K. have top dealers such as CarMax Business Services, LLC, and Asbury Automotive Group, which account for more than half of the volume share.

Fuel Type Insights

In 2022, the petrol segment held the largest volume share of over 41% due to the decreasing usage of diesel vehicles. The government discourages the purchase of used diesel vehicles, leading to the growth of the petrol segment. The other segment is expected to experience significant growth over the forecast period. In developing countries, there has been a sustainable increase in the sales volume of CNG-powered used vehicles.

Emission standards have become a major factor contributing to the decline in diesel vehicle sales. Stringent emission standards for compression ignition (diesel) vehicles and excessive emission of NOx have led to an increase in the substitute market. In contrast, the petrol-fueled car emission standard is less stringent, which has resulted in a growing consumer base for petrol cars with refined engines, good fuel efficiency, and strong top-end performance. Furthermore, the increasing inventory of petrol-based SUVs has been a driving factor for the growth of the petrol segment.

Size Insights

In 2022, the SUV size segment held the largest volume share of over 34%, causing a decline in other segments. SUVs provide space and size while remaining compact compared to off-road vehicles, making them an ideal choice for buyers in various regions. The demand for SUVs has led to a wider supply network, resulting in higher residual value for SUVs in the market. The used SUV market in the European region has witnessed significant demand traction.

Over the forecast period, the compact size segment is expected to register a significant CAGR. This is due to people's preference for economical and compact size vehicles. Franchised owners prefer compact size vehicles due to their high production rate and large inventory, making them easily available at affordable prices. While the demand for used compact vehicles has been high in recent years, changing consumer preferences and advancements in SUVs have led to significant growth in the used SUV market. This trend is expected to continue in the coming years.

Used Car Market - Regional Analysis

North America:

The North American used car market is expected to witness significant growth over the forecast period. The presence of large organized vendors and increasing demand for electric and hybrid vehicles is driving the growth of the market. The increasing awareness about the benefits of used cars and the availability of affordable financing options are expected to further fuel the growth of the market.

Europe:

Europe is one of the largest markets for used cars, and it is expected to continue its dominance over the forecast period. The high demand for SUVs and the increasing trend of consumers opting for sustainable mobility is driving the growth of the market. In addition, the presence of established players and favourable government policies are expected to further boost the growth of the market.

Asia Pacific:

The Asia Pacific used car market is expected to witness significant growth over the forecast period, owing to the increasing urbanization, rising middle-class population, and growing demand for affordable mobility solutions. The increasing availability of financing options and the entry of new players in the market are also contributing to the growth of the market.

Latin America:

The Latin America used car market is expected to witness moderate growth over the forecast period. The presence of a large unorganized market and the lack of awareness about the benefits of used cars are the major factors hindering the growth of the market. However, the increasing availability of financing options and the entry of new players in the market are expected to fuel the growth of the market.

Middle East and Africa:

The Middle East and Africa used car market is expected to witness significant growth over the forecast period, owing to the increasing demand for affordable mobility solutions and the presence of a large unorganized market. The increasing availability of financing options and the entry of new players in the market are also contributing to the growth of the market.

Competitive Landscape

To gain a competitive advantage in the market, key players are concentrating on expanding their customer base. As a result, vendors are undertaking strategic initiatives such as partnerships, mergers and acquisitions, and collaborations. For example, in 2020, Volkswagen announced a significant investment in the used cars market by collaborating its own used-car chain, Das WeltAuto, with various used car platforms. Major automakers are also expanding their presence in this sector by establishing pre-owned car sales networks, such as Maruti Suzuki's True Value, M&M Mahindra's First Choice Wheels, and Toyota's U Trust.

Key Market Players

• Alibaba.com
• Asbury Automotive Group
• AutoNation Inc.
• CarMax Business Services LLC
• Cox Automotive
• eBay Inc.
• Group 1 Automotive Inc.
• Hendrick Automotive Group
• LITHIA Motor Inc.
• Scout24 AG
• TrueCar Inc.
• Others

North America

• U.S.
• Canada
• Mexico
• Rest of North America

Europe

• Germany
• France
• U.K.
• Italy
• Spain
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• New Zealand
• Australia
• South Korea
• Rest of Asia Pacific

The Middle East & Africa

• Saudi Arabia
• UAE
• Egypt
• Kuwait
• South Africa
• Rest of the Middle East & Africa

Latin America

• Brazil
• Argentina
• Rest of Latin America

The Used Car market is segmented as follows:

Vehicle Type Outlook

• Hybrid
• Conventional
• Electric

Vendor Type Outlook

• Organized
• Unorganized

Fuel Type Outlook

• Petrol
• Diesel
• Others

Size Outlook

• Compact
• Mid-size
• SUVs

Sales Channel

• Online
• Offline

By Region