Used Vehicle Market

The Used Vehicle Market is valued at USD 1.7 Tn in 2026 and is projected to reach USD 2.6 Tn,  growing at a CAGR of 7% by 2033.

Market Analysis in Brief

The used vehicle market has steadily gained prominence since the 2008 recession and continues to grow at a rapid pace. There are wise-ranging factors that can be attributed to this industry’s ongoing success. Elements such as better financing, favourable policies, greater industry player involvement, urbanization, higher disposable incomes, etc. North America is expected to remain a dominant force in this landscape; however, the Asia Pacific is projected to index a significantly high CAGR over the forecast period. As the global automotive sector gravitates towards the use of more environmentally friendly vehicles, this is expected to create options for those would are not able to afford vehicles such as these and instead opt for comparatively economical options such as used or pre-owned vehicles.

Key Report Findings

• The global used vehicle market was roughly valued at over US$1.5 Tn in 2021
• The average age of a used vehicle in the US is 11.8 years
• In 2020, 40.4 million used vehicles were sold in the US compared to 14.5 million new vehicles
• The top-selling used car brand in the US is Toyota, followed by Honda, and Ford
• Asia Pacific to account for a significant market share over the forecast period
• Average used car mileage sold in the US is 68,000 miles

Growth Drivers

Affordability, and Greater Need for Private Conveyance

The International Organization of Motor Vehicle Manufacturers (OICA) states that the automotive industry contributes about 4% to the global GDP, which is estimated to grow at a CAGR of 20.78% by 2028. This statistical data highlights the increase in global car ownership. Of the total size of the car ownership market, a sizeable share is accounted for through used car ownership, and this is poised for further expansion by 2030. However, the launch of new entry-level cars is boosting demand which can directly affect used vehicle sales.

While the average ownership time of new cars has come down significantly compared to what it was earlier in the past decade, it still is a fact that the used car segment presents a wealth of options for first timers who are aspiring car buyers, that still find it safe to buy second-hand cars till they are daily driving proficient.

Franchise Dealers Aim to Offer Better Financial Schemes

Competitive pricing has been a significant advantage for companies operating in the used vehicle market. This market receives a strong tailwind from key industry participants as they consider amplifying their investments by setting up new dealership networks for used vehicles. Online sales of pre-owned or used cars remains a critical growth factor for the global used vehicle market. Research reveals that the options for financing new cars are relatively high in number but the same is quite expensive for used vehicles, which makes it difficult to find adequate financing options. This can potentially hinder market growth prospects.

Amidst other factors such as increasing consumer spending on lifestyle choices, and a flourishing import-export scenario, the growth of the used vehicle market is expected to significantly benefit from a variety of certified used vehicle programs. Franchise dealer prevalence due to the higher availability of better financial schemes has created favourable grounds for used car sales. Several online used car selling platforms such as Vroom, and Fair have partnered with OEMs to ensure reliability of their certified used vehicle programs, which is expected to prove advantageous for this market.

Compact Passenger Cars Segment to Lead, SUVs to Follow

Compact size or entry-level cars is expected to account for the largest volume share in the used vehicle market. This is in line with growing consumer preferences for economic and compact passenger cars. From the supply-side perspective, high production rates and more significant inventories have also been a preference for most franchise owners, which can lead to better supply chain management of these cars.

On the other hand, SUVs have been on a profitable growth trajectory, with both spacious and compact attributes when compared to premium vehicles. The distribution network and residual value for SUVs are relatively high; significant factors accounting for a rise in their demand.

Key Market Players Indulge in Used Car Dealerships

Automotive industry operators more than often keep new vehicles at the core of their business. It was only recently when even the biggest automakers started realising the potential and market worth of used vehicles. Global auto giants are now actively involved in used vehicle dealerships looking at the incessant competition and shifting consumer behaviour concerning the purchasing of cars.

Several new entrants are adding to the existing fragmented nature of used vehicle market competition. While most of these participants tend to be unorganised local companies, it is more likely that they would enter strategic partnerships in the future. New product segments are being launched by such newly formed partners as well as established players in this industry. Even premium car companies continue to channel efforts to leverage market potential of their own used cars. Luxury car brands such as Mercedes and Audi have their used car dealerships in place that garner a sizeable revenue to these respective companies.

Used passenger cars have especially been enjoying a greater share in the global market, which has eventually led to several brands’ networks specifically launched for used cars, such as Toyota’s U Trust, and Maruti Suzuki’s True Value. Furthermore, mainstream companies are investing in strategic expansion efforts through collaboration activities.

Growth Challenges

Adoption of Ride Sharing Trend

Ride sharing, though an economical mode of transportation for consumers, is quickly becoming a concern for used car dealers and financers. If ride sharing eventually dominates the private transportation market, there will only be a few owners during a car’s average lifespan, which will end up creating lower transaction volumes for the used vehicle market. However, the onset of COVID-19 has resulted in a 180-degree change in attitudes. The growing prominence of social distancing amid this pandemic situation is forcing people to incline more towards private conveyance rather than travelling in public transport vehicles. Used vehicles are thus gaining traction especially in developing economies as they are available in market at affordable costs. The temporary negative impact of financial disparities toward new vehicle sales will work in favour of the used vehicle market.

Growth Opportunities Across Regions

Used Car Market to Gain Traction in Asia Pacific

North America is expected to account for a significant share of the global used vehicle market over the forecast period. This can be attributed to the extensive presence of used vehicle dealers in the region, favourable economic growth, the availability of financing, as well as the popularity of SUVs and trucks. Moreover, the price of used cars here is relatively cheap compared to new vehicles. On the other hand, the Asia Pacific is expected to index significant growth over the forecast period. This can be chalked up to factors such as higher disposable incomes, booming population figures, urbanization, increasing popularity of cars, and better financing options, among others.

Key Market Players – Used Vehicle Landscape

Some key companies in the global used vehicle market include 

• CarMax
• AutoNation
• Lithia Motors
• Group 1 Automotive
• Penske Automotive Group
• Asbury Automotive Group
• eBay (including eBay Motors)
• CARS24
• Carvana
• TrueCar
• Scout24 (Auto Trader/Marktplaats platforms)
• OLX Autos
• Hertz Car Sales
• CarGurus
• Alibaba

Recent Notable Developments

• In 2020, Volkswagen announced a collaboration of Das WeltAuto with other reputed used car platforms
  
  
• In December 2019, Group1 Automotive Inc. Announced their acquisition of two Lexus dealerships to expand their presence in New Mexico
  
  
• In December 2019, HELLMAN & FRIEDMAN LLC entered a contract to buy AutoScout24. Through this acquisition, the company aims to provide value-added marketing solutions as it continues to digitize its business models

Global Used Vehicle Market Segmentation is Listed Below:

Vehicle Type

• Hybrid
• Conventional
• Electric

Vendor Type

• Organized
• Unorganized

Fuel Type

• Diesel
• Petrol
• Others

Size

• Compact Car
• Mid-Sized
• SUV

Sales Channel

• Offline
• Online

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa