Used Car Market is driven by growing demand for affordable vehicle...

Used Car Market is driven by growing demand for affordable vehicle options

Posted 2024-05-20 10:39:39

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The used car market deals in the sale and purchase of pre-owned or previously owned motor vehicles. Used vehicles have depreciated significantly from their initial purchase price and hence provide a more affordable mobility option. They can range from slightly used vehicles that are a few years old to older models that may be 10-15 years old. Some of the key advantages of opting for a used vehicle include lower purchase price, adequate performance for regular commutes, and variety of makes and models to choose from. With rising living costs and inflation, many individuals and families are gravitating towards the used car segment to fulfill their transportation needs in a cost-effective manner.

The Global Used Car Market is estimated to be valued at US$ 1.78 Tn in 2024 and is expected to exhibit a CAGR of 6.3% over the forecast period 2024 To 2031.

Key Takeaways

Key players operating in the Used Car Market Size are Arnold Clark Automobiles Ltd., Asbury Automotive Group Inc., AutoNation Inc., Autotrader, AutoScout24, Universal Motor Agencies, CarMax Inc., Carvana, Cox Automotive Inc. (Autotrader), Emil Frey AG, Group 1 Automotive Inc., Inchcape Group, Lithia Motors Inc., CarMax Business Service LLC, Asbury Automotive Group, AutoNation Inc., eBay Inc., Big Boy toyz, VROOM, Others. These companies operate brick-and-mortar dealerships as well as robust online platforms for buying and selling used vehicles.

The demand for used cars is growing steadily owing to economic uncertainties and rising living costs. Customers are increasingly choosing to purchase slightly used vehicles that can fulfill their daily commuting needs at affordable price points. Additionally, the growing network of online used car marketplaces has made the discovery and purchase process more seamless and convenient for buyers.

With rising education and income levels in developing markets, an emerging middle class is able to participate in the automobile sector. Several global used car retailers are actively expanding into Asia Pacific and Latin American regions to tap into this growing demand. The ease of online browsing and commerce has also enabled cross-border sales between developed and developing markets.

Market Drivers

Rising cost of new vehicles is a key factor pushing customers towards the used car market. Manufacturers regularly increase prices of new models to account for higher material, technology and compliance costs. Additionally, interest rates on auto loans have risen making new car purchases less affordable. This has strengthened demand for good condition used cars that provide similar utility at lower price points.

Impact of geopolitical situation on the growth of Used Car Market
The global used car market is facing challenges due to the current geopolitical instability across several regions. The outbreak of war between Ukraine and Russia has significantly disrupted international trade and supply chains. Many automakers have halted their operations in Russia which was one of the major exporters of used cars to European nations. The sanctions imposed on Russia by western countries have made trade and transportation of used vehicles very difficult.

At the same time, the ongoing conflict is triggering high energy costs across the globe. Fuel prices have reached historic highs in several countries. This is negatively impacting consumer sentiment and their ability to purchase used cars. Higher transportation costs are also reducing the margins of used car dealers. The uncertain geopolitical situation in many parts of Europe and Asia is keeping consumers away from making big-ticket purchases like vehicles.

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