The used car market is thriving at good acceleration

India's used car market is going full throttle even as new car sales decelerate. Citing a Mahindra First Choice report, that nearly 4 million second-hand cars were bought and sold in FY19 compared to 3.6 million new ones. Experts attribute the growth in the pre-owned segment to more frequent upgrades, greater demand for luxury cars, and a downward revision in GST from 28% to 12-18%. But nearly four-fifths of the market remains unorganised, the organized used car market is very small than the unorganized sector. Organized sector accounts to about 15-20% of the overall used car transactions. While the unorganized sector takes the remaining market share. Resulting in challenges such as standardisation of dealership experience, pricing mechanism and a lack of formal financing.

Companies like Droom, mahindra first choice, cars24, cardekho understands the potential of second hand market thus solving the problems and bringing out successful outcomes.

Experts says that this increase in used car sales trend will increase and in the coming years, compared to new car business, used car business is set to grow at a much faster pace.

Used car market is mostly active in the entry level segment. Most used cars sold in India are-Maruti Alto, WagonR, Swift and Hyundai i10. These 4 cars account for 60% of the used car market. In comparison, new car market has seen a change in trend, the entry level sedan segment that is seeing a growing demand.

Establishment of used car showrooms from leading brands like Maruti's True Value, Mahindra's First Choice, Toyota's U-Trust, Hyundai's H-Promise, Renault's Renault Selection and Tata's Assured Cars plays bigger role in second hand car Sales. These showrooms offer customer centric facilities, easy finance options and also have a better profit margin .Additionally to make deal more attractive, these used car dealers also offer extended warranty, free service for 6 months, warranty, exchange offers, etc. These offers are similar to those seen on the new car market.