Used Car Market Analysis APAC, North America, Europe, Middle East and Africa, South America - US, China, Germany, UK, France - Size and Forecast 2023-2027

Used Car Market Forecast 2023-2027

The global used car market is estimated to be worth USD 2,540.33 billion in 2027, exhibiting a CAGR of 6.7% between 2022 and 2027. The growth of the market depends on several factors, including the increasing number of new models of cars launched due to high competition, the declining ownership cycle of vehicles among urban consumers in emerging countries, and the excellent value-for-money proposition of used cars. 

The market analysis focuses on examining the trends, dynamics, and factors affecting the sales and prices of pre-owned vehicles. It involves evaluating market conditions, such as supply and demand, consumer preferences, and economic factors, to understand the performance of the market. The analysis helps in identifying popular car models, brands, and price ranges in the market. It provides insights into depreciation rates, average mileage, and maintenance costs for different types of used cars. The analysis can assist in predicting future trends and making informed decisions for buying or selling used cars.

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The market is witnessing significant growth driven by various factors. With the rise of environmental concerns, consumers are increasingly turning to electric and hybrid used cars, leading to a surge in demand for eco-friendly options. Rental and fleet services are playing a pivotal role, providing access to diverse consumer bases through online platforms and e-commerce channels. In this evolving landscape, reliability is paramount, with features like adaptive cruise control and lane-keeping assistance enhancing vehicle safety and trust among buyers. Advanced imaging technologies and vehicle history report further streamline the used car buying process, ensuring transparency and confidence in transactions. As the market continues to expand, mobile apps and innovative inventory management solutions are reshaping the automotive industry, offering convenience and efficiency to both buyers and sellers alike.

Market Dynamics and Customer Landscape

The market is witnessing a surge in demand, driven by safety features, durability, and environmental concerns. Modern cars equipped with adaptive cruise control and lane-keeping assistance enhance reliability and safety, catering to diverse consumer bases. Online platforms offer transparency in the buying process, providing vehicle history reports and advanced imaging technologies for trust and confidence. E-commerce platforms facilitate transactions and access to electric and hybrid used cars, aligning with environmental priorities. Rental and fleet services, along with mobile apps, streamline the used car buying process, expanding the market's reach and accessibility for personal transportation needs worldwide. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, market trends and analysis, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Drivers

The declining ownership cycle of vehicles among urban consumers in emerging countries is notably driving the pre-owned car market growth. The ownership duration of cars is shortened owing to new technological advances in automotive which attract customers to buy new cars. However, due to financial constraints, customers often sell their existing cars to dealers or online used car portals to use the funds raised for a new car purchase. Moreover, the easy availability of bank loans also facilitates the financing for new car purchases.

The factors determining the prices of used cars are the number of years the vehicle was driven, the distance driven, and the number of damages caused due to accidents and other faults. In India, having no major faults can fetch up to 70% of its actual price after one year of ownership and about 62% of its actual price after three years of ownership. Such convincing values encourage car owners to sell their cars at the earliest convenience to get back most of the car value. Hence, these factors will drive market growth during the forecast year. 

Significant Market Trends

Growing demand for car subscription services is an emerging trend in pre-owned used vehicle. The alternative to owning or leasing a vehicle is a car subscription. These consumers are allowed to use a car for an all-inclusive monthly fee, which includes roadside assistance, insurance, and maintenance. Such programs also allow the subscriber to change cars at a notice of a few days. 

Several car options and services are provided by various auto manufacturers and Cox Automotive in major regions across the globe. For instance, Volvo's car subscription service is called Care by Volvo. Some of the other companies, such as Volkswagen, Hyundai Motor Co. Mahindra and Mahindra Ltd., also offer car subscription services. Additionally, consumers who find high-priced cars unaffordable due to their high cost of ownership or leasing prefer such car subscription services to get the experience of driving a luxury car. These services augmented the demand for these cars. Therefore, these factors will drive the car market trends during the forecast period. 

Major Market Challenges

The increase in the number of on-demand taxi operators is a major challenge impeding the pre-owned car market. Owing to the financial constraints of some users on-demand taxi services have emerged as a convenient alternative to purchasing a new car. On-demand taxi services provide convenient and comfortable means of transport as well as save time and energy on finding suitable parking. Moreover, unlike self-drive car rental companies, on-demand taxi operators need not maintain a fleet but rather be available to a potential customer through the means of mobile applications. The business model is flexible and easier to manage than self-drive car rental companies. 

On-demand taxi operators are also focusing on introducing on-demand bike taxis to tap into more customer segments. Major on-demand taxi operators like Uber and Ola cabs also invest in advertisements spanning over mediums like digital, television, and print to increase their brand awareness. Hence, the above-mentioned factors will hinder the global market growth during the forecast year.  

Customer Landscape

The market forecasting report includes the adoption lifecycle of the pre-owned car market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Markets Customer Landscape

Key Players in the Industry

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, revenue share, industry participants, new technologies and product/service launches, to enhance their presence in the pre-owned used vehicle.

Berman Auto Group - The company operates under one segment. The company under this segment offers certified second-hand cars and new cars under various ranges of prices. The key offerings of the company include various second-hand cars such as Nissan car, Ford Edge, Base AWD, and Nissan Armada.

This market research and growth report also includes detailed analyses of the competitive landscape, popular models and brands in the used vehicle market and information about 15 market companies, including:

• Alibaba Group Holding Ltd
• Asbury Automotive Group Inc.
• AutoNation Inc.
• Autotrader Inc.
• CarGurus Inc.
• CarMax Inc.
• Cars24 Services Pvt. Ltd.
• DriveTime Automotive Group Inc.
• eBay Inc.
• Group 1 Automotive Inc.
• Hendrick Automotive Group
• Hertz Global Holdings Inc.
• Lithia Motors Inc.
• Mahindra and Mahindra Ltd.
• Penske Corp.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Segmentation

In the market, consumers prioritize safety features and seek modern cars with advanced technology. Used vehicles cater to a diverse consumer base, serving as reliable options for personal transportation needs. The industry applications of used cars extend to various sectors, including private ownership, commercial fleets, and rental services. With the rise of e-commerce platforms and online presence, consumers can explore a wide inventory of pre-owned vehicles conveniently. Automotive industry players leverage infotainment systems and other technological advancements to enhance the appeal of used cars. Additionally, comprehensive vehicle histories provide transparency and assurance to buyers, facilitating informed purchasing decisions in the dynamic market.

By Vehicle Type

The compact car segment is the fastest-growing segment in the used vehicle. Compact-size car is a vehicle size class that is between sub and mid-size cars.

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This segment was valued at USD 767.15 billion in 2017 and will continue to grow until 2021. The segment in the market is driven by the increasing specifications of compact cars and the rising need for personal mobility. In the current scenario of increasing traffic congestion, these cars are easier to drive than large car. Also, they emit significantly fewer harmful gases and are, therefore, witnessing high adoption. Moreover, the fluctuating prices of fuel and the growing preference for fuel-efficient personal mobility solutions drive the segment in the global market. India is one of the largest markets in the pre-owned compact car segment. The improving quality offered by the organized sector drives the demand for the segment. These factors will boost the demand.

Key Regions

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APAC is estimated to contribute 41% to the growth of the global market. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the industry used vehicle during the forecast period.

APAC is home to some of the largest automotive markets in the world. In APAC, the high demand for four-wheelers, especially in China, is contributing to revenue generation in the regional market. In addition, the growing popularity retailing in emerging markets, such as India, is driving the growth of the regional industry. The structure and efficiency of dealership networks play a crucial role in the distribution and sale of vehicles, enhancing accessibility for consumers. Car ownership remains a significant milestone and aspiration, influenced by factors such as financial considerations, lifestyle choices, reliability and accessibility to public transportation alternatives. The Asia-Pacific region, encompassing countries like the Philippines, Italy, Thailand, Egypt, Malaysia, Indonesia, Mexico and Turkey, emerges as a dynamic and influential market with unique consumer preferences and regulatory environments. 

Market Analyst Overview

The market continues to thrive, driven by diverse consumer demands and evolving industry applications. Safety features and durability remain paramount considerations for buyers, ensuring modern cars meet stringent standards. Online platforms provide transparency in the buying process, catering to a diverse consumer base seeking personal transportation solutions. Rental and fleet services augment the market, offering flexibility and convenience. With an increasing online presence on e-commerce platforms, electric and hybrid used cars gain traction, addressing environmental concerns. As the market evolves, the emphasis on safety, durability, and environmental sustainability underscores the growing importance of used vehicles in the automotive landscape. In the global market, buyers benefit from advanced features like infotainment systems and convenient mobile apps, which provide access to extensive inventory, detailed vehicle histories, streamlined transactions, and Advanced imaging technologies, enhancing the overall purchasing experience.

The market is experiencing significant shifts driven by environmental concerns, technological advancements, and regulatory changes. With a focus on reducing the carbon footprint, eco-friendly vehicles such as hybrid and electric cars are gaining popularity, addressing issues of air pollution and greenhouse gas emissions. Aging vehicle fleets prompt consumers to consider modern vehicles equipped with advanced features like adaptive cruise control and lane-keeping assistance. Trust is crucial in the used car buying process, facilitated by vehicle history reports and virtual inspections. Regulatory incentives such as tax incentives and rebates further encourage the adoption of eco-friendly models. Accessible financing options with competitive interest rates and flexible loan terms support the market's growth trajectory, shaping the future outlook of the automotive industry.

Segment Overview

The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.

• Vehicle Type Outlook 
  • Compact car
  • SUV
  • Mid size

• Channel Outlook 
  • Organized
  • Unorganized

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Argentina

Used Car Market Scope
Report Coverage	Details
Page number	168
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 6.7%
Market growth 2023-2027	USD 703.33 billion
Market structure	Concentrated
YoY growth 2022-2023(%)	6.18
Regional analysis	APAC, North America, Europe, Middle East and Africa, and South America
Performing market contribution	APAC at 41%
Key countries	US, China, Germany, UK, and France
Competitive landscape	Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks
Key companies profiled	Alibaba Group Holding Ltd, Asbury Automotive Group Inc., AutoNation Inc., Autotrader Inc., Berman Auto Group, CarGurus Inc., CarMax Inc., Cars24 Services Pvt. Ltd., DriveTime Automotive Group Inc., eBay Inc., Group 1 Automotive Inc., Hendrick Automotive Group, Hertz Global Holdings Inc., Lithia Motors Inc., Mahindra and Mahindra Ltd., Penske Corp., Scout24 AG, Sonic Automotive Inc., Toyota Motor Corp., and TrueCar Inc.
Market dynamics	Parent market analysis, Market growth and trends and inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period.
Customization purview	If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market report during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2023 and 2027
• Precise estimation of the industry size and its contribution to the parent market
• Accurate predictions about upcoming trends and changes in consumer behaviour
• Market growth analysis across APAC, North America, Europe, Middle East and Africa, and South America
• A thorough market analysis and report of the market’s competitive landscape and detailed information about companies
• Market forecasting of factors that will challenge the growth of pre-owned used vehicle companies

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