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Price Difference-A Gateway for First-Time Car Buyers to Used Market

"The Used car market will touch the sales of 70 Lakhs by 2025"- TOI. Did you know the fact that most used cars are sold to customers between the age group of 24-40? Do you want to know why? Times of India says it's due to a pandemic, and the whole trend occurred when people were urged to buy their vehicles to commute without depending on public transport for safety. "India’s booming used car market is being driven by first-time car buyers in the 20-40 year age group", reported by TOI. In a recent report, one of the used car retailers Spinny revealed that 55% of used cars are bought by first-time car users. 


A couple of new surveys explained that affordable pricing and ease of acquisition have taken first-time car users to the used market, which is set to increase nearly to 8 million units by FY26, and will experience sales growth of 15% in the next four years. Online or digital used car platforms will increase in the next five years without any doubt. The used car volume has expanded more than the new car market. India sold 2.7 million new passenger vehicles with the clock sale of 4 million in FY21. According to the data, the used car market has risen from 3.3 million and the new car market experienced a sudden fall from 3.4 million compared to 2.8 million units sold in FY16. Spinny’s report for instance also shows that 26% of its buyers are women, and 41% chose online purchases.

 The above data provides a clear understanding of the price difference between the used car market and the new car market range. 

 Let's get started!!

First-time car users & interest in Used-Cars

  • Apart from the digital point of view, the report clearly shows that first-time car owners account primarily for used cars in India. Nearly half of the used cars have been sold to first-time users in India.
  • The share has expanded by 8-10% during FY21 in the backdrop of the pandemic, primarily because of public transport restrictions.
  • The price of a used car is way lesser compared to a new car. The cost includes depreciation, higher taxes, RTO & registration fee, and expensive car insurance policies.
  • When the cost of a new Hatchback is 7 lakhs, the used car rate is 4 lakhs. The used cars will not have any depreciation and are much more affordable with low insurance premiums.
  • Small towns are in the zone of this growth and are expected to rise to 70% from the current 55% in the next four years.

Key factors driving used car growth in India

  • Data monetization, in-vehicle connectivity, subscriptions, rental, charging, and long-term maintenance.
  • Reduced period of car ownership among the Millenials
  • The transition from BS-IV to BS-VI, and GST differentials on used cars vs new cars.

Change in First-time buyers' Behaviour

  • Price differentials have brought a change in the thought process of first-time buyers. India has been a price-conscious market given the multitude of available options. 
  • Unlike earlier days, used cars today have more societal acceptance as people have understood the cost depreciation in new cars by 30% in the first year of the purchase.
  • So, first-time buyers find used cars the best option to meet their price sensitivity and value consciousness.
  • Once upon a time, customers preferred to own a car for 6 to 8 years which has now reduced to 4 years and is expected to go down to 3.5 years in the coming days or years. This is one of the prominent reasons for the rise in used cars purchase.

Cheaper yet efficient as a new car

  • Most cars in the last 5 years have had standard safety features like airbags, ABS, and reverse parking sensors that customers require in their cars. 
  • Getting back to the interiors, these cars have USB, Bluetooth, and AUX connectivity. You can also find a used car with an amplifier, sub-woofers, leather seats, reverse camera, and touch-screen infotainment installed by the owner if you're fortunate enough.
  • When you get the used cars lesser than the price of the new cars with the same features and good condition, why not go for it?

Low insurance premiums add an advantage

  • One of the extreme benefits of used cars is cheaper insurance costs. The premium amount of insurance reduces with the age of the car and is calculated according to the depreciation of the car when sold or bought.
  • The premium amount of the insurance is also recalculated during the ownership transfer which results in cheaper car insurance.

When first-car buyers are learners

  • For learners, used cars make the best option to drive and practice better. For beginners, a dent or a scratch is very common and it's wise to go buy a new car once you’re thorough with driving and confident to take on the crowded Indian roads.
  • India's used car market is more stable than the new car market. According to Economic Times, the second-hand car industry has grown from 1.6 million units in 2011 to 3.3 million units in 2018 and still growing.



Kuwy provides first-time car buyers multiple options with different price ranges. Just one on "car price" and you will know the entire car evaluation. For first-time users, Kuwy helps with end-to-end purchases right from choosing your car to driving on the road. For better learning, download the Kuwy app.


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