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Why Used car demand and Price have increased in India

In recent years, consumers' interest in and faith in used or pre-owned vehicles has skyrocketed. Several causes are fueling the expansion of the used automobile market in India, which now outnumbers the new car market. New car sales fell 17.8% in FY20 as a result of the COVID-19 crisis, while used car sales gained 5%. Furthermore, in India, used automobile sales are 1.5 times larger than new car sales. In the future years, the gap is anticipated to expand. The Indian used automobile sector is benefiting from increased digitization and innovative business models.

 Customers feel it’s a safe option

The behavior of customers is the driving force behind the sector's expansion. Given the variety of options available, India has always been a price-conscious market. Unlike in the past, secondhand automobiles are now more widely accepted since consumers have grasped the concept of a new car's cost depreciating by 30% in the first year of ownership. As a result, the customer considers a used car to be a superior alternative because it satisfies their price sensitivity and value consciousness.

 Digitalization helping in buying decisions

The introduction and widespread usage of online platforms has aided in the growth of used automobile businesses. Digitization has also played a role in bringing the used automobile sector online, which had previously remained offline.

Customers may now search through a variety of used cars that fit within their budget thanks to the availability of online portals. It has also made customers aware of their prospective purchases and enabled them to conduct in-depth research.

Modern automobiles are significantly more dependable than their predecessors, thanks to advancements in technology! A well-maintained vehicle will readily run for years without issue. This means that even if you are a second-time automobile owner, you can expect a hassle-free ownership experience. Manufacturers are also offering extended warranty durations  in some situations, which is strongly advised to a used car buyer so that any manufacturer-related issue can be addressed without incurring any additional fees.

 Demand for personal mobility

Following the Covid-19 outbreak, people's preference for personal mobility has skyrocketed. Consumers are steering clear of public transit and even shared mobility solutions. They are instead concentrating on purchasing personal vehicles for themselves and their families. Simultaneously, they are troubled by a decision to purchase a large-ticket item such as a car. Buying secondhand automobiles is a solution for balancing these two aspects. This is a major factor driving the increase in used car sales in India.

People started using shared mobility aggregators like Ola and Uber to save money while getting the convenience of relatively personalized transportation. However, the Coronavirus outbreak has altered the scenario, and people are reluctant to use app cabs for fear of contracting the virus. In a nutshell, the pandemic reignited interest in personal automobile purchasing. Simultaneously, job insecurity, income reduction, and job loss fostered a sense of unease. The demand for old cars is increasing as a result of this. According to the report, after the unlocking in CY2020, demand for pre-owned cars increased by 20-30% compared to pre-Covid periods.

New Business models

The arrival of legacy businesses into the segment is one of the most important reasons that has aided the development in consumer interest in purchasing used automobiles. Customers can visit secondhand automobile stores run by auto manufacturers such as Maruti Suzuki, Toyota, Mahindra, and Tata Motors etc.,

Easy Finance

Finance is one of the most important factors to consider when buying a second car.  The majority of dealers in the market offer finance or emi with no down payment. When buying a used automobile, it's crucial to look for more convenient emi choices with lower interest rates. 

 With the increase in demand for used cars, it is always important to think beyond and believe in technology. Kuwy is the world's first AI-powered automotive fast loan platform, allowing you to get your ideal car in only a few steps. K2C- used car certification platform using AI, ML, and Phygital (Digital & Physical)- allows dealers and car owners to acquire a detailed valuation of their vehicle. For More information, download Kuwy App in Google play store and App store.

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