Used car sales have been recording promising growth since the fourth quarter of 2020. Compared to the lukewarm performance of second hand car sales in 2019, it has been an astonishing return. Multi-brand used car dealerships have played a prime role in energizing the market and attracting customers.
The customers have a plethora of options to buy second hand cars in India. They can simply choose a reliable car seller, check out the collection and choose one of their choices. Unlike before, wherein, it was a daunting task to search for the specific model one wants, negotiate with the seller, buy the car and complete the formalities. Financing was also not available for pre-owned cars earlier.
Many reasons led to the revival of the used car market. And given the momentum it wanted. Read along with this, the slowdown of new car sales. It has registered around 2.8% sales in 2020, which is the lowest sales percentage in recent years.
What defines the used car market boom? What are the reasons for the significant growth in second hand car sales?
We are looking into the reasons, which might have been favorable for the pre-owned car market.
Better Resale Value
The value of a new car comes down remarkably in the first year itself. The depreciation may go up to 50% for some of the models. A used car will give a better value even if one sells it. The seller will not be losing much money compared to the new car. This economical factor has been one of the driving forces behind the increased sales of used cars in India.
Growth in Economy
India is growing at a phenomenal rate. The consumers are also adapting to the way of life as in developed countries. It is evident in the disposing culture as in those countries. Most of the customers nowadays go for a new vehicle after about 5 to 8 years of usage. Instead of repairing or overhauling a vehicle.
High Demand
The scenario has changed so much that people prefer to travel by their personal vehicle, rather than public transport. Many of them have budgetary constraints and hence buying a new car is not feasible. This has resulted in an elevated requirement of second hand cars. People who wanted to change their cars were quick to recognize this opportunity. In turn, causing a rise in the availability of second hand cars. The increased availability resulted in increased sales.
Credible Car Sellers
Many car showrooms, which were selling new cars earlier, have introduced the pre-owned car segment as well. Customers can now own second hand cars of assured quality and an extended warranty from such sellers. In addition to affordable pricing. The concerns like finding the car, paying a hefty brokerage, negotiations, and uncertainty about the quality of internal components have been wiped out by the reliable car showrooms. They institute a proper procedure for inspection and reconditioning of the second hand car before selling it. Thus enhancing the confidence of customers that improved used car sales in India.
Financing Options
Presently, financing is available for used cars also. In fact, the car dealers will facilitate car loans from the bank of the customer’s choice. You can get a car loan without any hassles if you have the requisite documents. The executive at the car dealership will help you complete the formalities and obtain the loan.
So that you can own the car without waiting much. The professionals at the showroom will complete the documentation part at the RTO as well, before delivering you the car. Such an easy method; customers find it the best to buy a used car at a competitive price.
Build Quality of the Cars
The improved build quality of the cars promises more life. Having better quality components, accessories, and overall structure, the vehicles will not require frequent workshop visits even if one buys a used car. That has been another factor for the boom in the used car market.
Will the Used Car Market Boom Continue?
In all probabilities, the used car market growth is expected to continue. Even though the new scrap policy introduced by the central government has caused confusion at different corners. The reason for the predicted growth is the average life of cars sold in the used car market. At present, used cars of 5 to 8 years of age are coming to the market. Earlier, the period was above 10 years. Considering the growth of the Indian economy, the used car market will soon have more cars of 3 to 5 years of age.
The availability of relatively new cars will attract more buyers towards used cars. By 2025, second hand car sales will double if the sale continues in the same manner.
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