India’s Used Car Boom: Rs 4 lakh crore market grows faster than new vehicles, set to triple by 2030
Driven by digitalisation, affordability, and aspirational ownership, the used car sector is clocking double-digit growth and attracting massive investments, but gaps in standardisation, paperwork, and supply still hold back its full potential.
ADVERTISEMENT
India’s used car market is racing ahead, riding on the back of rising aspirations, faster tech adoption, and greater affordability. With the market currently valued at a staggering Rs 4 lakh crore and over 6 million cars expected to be sold in 2025, pre-owned vehicles have firmly shed their "second-best" tag.
Experts believe the sector is on track to grow at a CAGR of 12–14%, projecting a market size that could be three times that of new car sales by 2030.
“The used-to-new car ratio is already at 1.4:1,” says Vivek Datta, MD and CEO of Globe Toyota. “And with better financing options and growing trust in OEM-certified programs, this space is steadily expanding at 8–10% annually.”
Unlike earlier, when pre-owned vehicles were largely a fallback option for budget-conscious buyers, they’re now becoming the preferred choice for many first-time and even upgrade-oriented consumers.
“India’s used car market is evolving rapidly,” says Hanish Yadav, SVP & Business Head at Spinny. “From around 3.5–4 million units in FY21, we’ve reached 5.5 million cars sold in FY25, with consistent growth that has outpaced the new car market.”
This surge is powered by multiple structural shifts:
Shorter ownership cycles: Car ownership has dropped from 6–8 years to 4–5 years, feeding a growing inventory of nearly-new vehicles.
Wider reach: Platforms are expanding into Tier 2 and 3 towns, making pre-owned vehicles accessible to a broader customer base.
Digital transformation: With online platforms offering warranties, return windows, and financing options, the used car buying experience now closely resembles that of new car purchases.
“We are seeing strong Y-o-Y growth, with customers preferring certified cars, transparent pricing, and after-sales support,” Yadav adds. Spinny, for instance, is targeting 50% revenue growth in FY26 backed by expansion, innovation, and operational scale.
A Mixed Road: Opportunities and Obstacles
While the potential is immense, challenges persist. Nearly 45% of the market remains unorganised, which leads to inconsistent vehicle quality, murky documentation, and financing hurdles.
According to Avinash Gupte, COO - Lease, Avis India, “The Achilles heel is ownership transfer and paperwork. Many buyers are forced to trust untraceable intermediaries, with risks ranging from insurance disputes to fraud.”
Global disruptions, such as supply chain delays from China, primarily affect new car production, but this indirectly boosts the pre-owned market.
“A tight new car supply pushes more consumers to explore used vehicles,” Gupte notes. “And once supply resumes, the pre-owned segment benefits again from increased inventory.”
Additionally, India’s rapidly expanding road network, adding 30 km/day, with a target of 100 km/day, and growing gig economy are fuelling vehicular demand in both urban and rural belts.
In the two-wheeler space, the growth is equally promising. India sells nearly five times more two-wheelers than four-wheelers annually, and with 25 million youth entering the 15–19 age bracket every year, the pipeline for pre-owned 2Ws is robust.
Ad Spends and Tech-Led Growth
The advertising landscape is also evolving with the market. “Ad spends in this category have scaled sharply,” says Datta. “We’re investing more in digital to build awareness and trust, supporting the shift toward a more organised and tech-enabled ecosystem.”
Startups and organised players are introducing industry-first offerings like Spinny’s 3-year warranty with Assured+ and 5-day moneyback guarantees, reflecting consumer demand for security and peace of mind.
Avis India is eyeing 100% year-on-year growth over the next decade by positioning itself as a mobility solutions provider rather than just a seller. “Our ambition is to create value not just through transactions, but holistic ownership support,” Gupte adds.
As the Indian economy matures, consumers are seeking value without compromise. In many cases, used cars are offering better ROI than new ones, lower depreciation, high build quality, and increasingly comparable post-sales support.
With government digitalisation efforts streamlining registration and compliance, the sector is poised to become more accountable and transparent, say industry observers.
