Used car mkt sees price surge, SUV demand
January 22nd , 2024
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With new car prices soaring over the last few years, the value of used cars has also
gone up. In the last two years, the average ticket prices in the used car market has
gone up to 6-6.5 lakh from INR 3-3.5 lakh, said Vinay Sanghi, CEO, CarTrade group
"Since new car ticket size has also gone up by around 30%, it's spilling over to the used
car market too as in all types of cars, people opt for buying the top-end variant," he
said.
When Dilip Singh was looking to sell his seven-year-old SUV whose odometer had clocked nearly 1
lakh km, he was surprised to find that he managed nearly 70% of the cost of the vehicle.
With new car prices soaring over the last few years, the value of used cars has also gone up. In the last
two years, the average ticket prices in the used car market has gone up to 6-6.5 lakh from INR 3-3.5
lakh, said Vinay Sanghi, CEO, CarTrade group "Since new car ticket size has also gone up by around
30%, it's spilling over to the used car market too as in all types of cars, people opt for buying the topend variant," he said.
Used car marketers say the demand pull means a slightly older SUV is available for the price of a
hatch. "Currently, used SUV prices can start from as low as INR 3.5 lakh while hatchbacks prices can
start from INR 2 lakh only," said Gajendra Jangid, co-founder and CMO, CARS24 Services.
Compact SUVs have become top draws, and in the luxury space specific models like the MercedesBenz C-Class, Audi Q3, and BMW X1 Series are particularly popular, said Niraj Singh, founder and
CEO of Spinny. The platform's top models range from just under INR 2 lakh to INR 7.5 lakh. While
the Grand i10 starts from 1.5 lakh, a Baleno is priced between 4.7 lakh and INR 7.1 lakh, while a used
Kwid is available from around INR 2.49 lakh to INR 4.9 lakh.
"The new car product mix has been changing in favour of SUVs which are pricier and these have
started to come to the used car market as well. Also, many new entry-level car buyers are preferring to
buy better equipped, bigger B-seg used cars at the same price. This has also led to the decline of the
entry level segment which has not seen any new offerings," said Ravi Bhatia, president, JATO
Dynamics The used passenger vehicle market is currently estimated at 5.5 million units, growing 10-
12% annually, compared to the new PV market of just over 4 million units.
What is also helping is easy availability of finance. CarTrade, which acquired OLX last year, for
instance offers a financing marketplace for used products both auto and non-auto. Typically, second
hand car finance comes at a higher cost of 11.4-15% compared to 8.2-10.5% for new ones.
That trend is also true for used two wheelers which is witnessing the kind of premiumization that the
passenger vehicle market is going through.
"There is growing demand for higher end two wheelers including Royal Enfields and Pulsars with a
30-40% rise in ticket sizes in the last 2-3 years," said Sanghi of Car Trade. Part of the reason for prices
firming up is the demand bounce back, he added.
Source: auto.economictimes.indiatimes.com
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