In 2025, India’s used car market is at an exciting point. It has become one of the fastest-growing sectors in recent years. This is because of people’s mindset about buying cars, new government rules, and technology. They believe in having personal transportation within budget. Besides, experts think this market will be worth 36.39 billion USD by the end of 2025. It will keep growing strongly for the next several years, changing the perspective of millions of people about owning personal mobility.
Used Car Market Size and Growth Projections
To calculate market size and growth, CAGR (Compound Annual Growth Rate) is a useful metric. It is like finding the average yearly growth of something over a period of more than one year. Accordingly, the pre-owned car market in India is growing at a CAGR of 15.10 % from 2025 to 2032. By then, it could be worth around USD 90.2 billion. This means the Indian used car market will grow unexpectedly in the upcoming years.
Focusing on annual sales of second-hand cars, it is expected to go up from 4.6 million in 2023 to 10.8 million by 2030. This huge increase is because these pre-owned vehicles are economical. Also, the price difference between the used and new cars is getting wider. These days, people have become more value-driven regarding their money.
Key Growth Drivers of India’s Used Car Market
There are numerous reasons for the instant growth of this sector. A few of them are:
- Affordability and Good Value:
Due to new safety rules and pollution standards, new cars are getting more expensive. Sometimes, it becomes hard to get all the parts needed to make them. For this reason, people are running after used cars.
Additionally, one can get higher-end models of pre-owned cars at the same price as a new one.
- Financing and Buying Online:
It has become easier to get loans to buy old cars. In 2024, about 23% of second-hand car buyers, especially youngsters, applied for loans.
On the other hand, various online platforms have made buying these previously-owned vehicles easier. They offer clear information, convenience, and often sell cars that are checked and certified.
- Shifting Preference
Nowadays, people want vehicles with newer technology. Hence, the demand for Automatic Transmissions has risen. For the same, one does not need to change gears oneself. Additionally, Electric Vehicles (EVs) have also become consumers’ priority. Also, pre-owned SUVs (Sports Utility Vehicles) are still very popular because of their usefulness.
- Government Support
By reducing taxes on some parts of India, the government is making it easier to access EVs. These include import duties on EV batteries. Also, with Production Linked Incentive (PLI), they offer money to companies that manufacture these cars. New rules for used car dealers are also making the market more trustworthy, with different requirements for certifications.
- Geographic Expansion
The rising middle class and growing shifts to cities result in an increase in the need for personal transportation. Also, smaller towns and rural areas are becoming important markets for pre-owned cars because public transportation is not great there. Also, people want convenience there.
Challenges That Could Slow Down Growth
Even though things look great, there are some challenges associated with the used car market. Recently, the GST on these cars went up from 12% to 18%. This could make second-hand cars more expensive and slow down the growth of the market. Also, the market depends on stable government rules. If things change for the worse, it could affect the market.
Future Outlook
With higher customer expectations, India’s 2025 pre-owned car market is becoming more organised and digital. Easier loans, trusted online platforms, growing interest in used EVs, and government support are all driving its continued growth.
Overall, the used car market in India will continue to be a key way for people to get around, along with affordable options. There will be a wide variety of choices and convenience for the buyers.
