Used Car Market Size, Share & Trends Analysis Report By Vehicle Type (Hybrid, Conventional, Electric), By Vendor Type, By Fuel Type, By Size, By Sales Channel, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global used car market size was valued at USD 1.57 trillion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 6.1% from 2022 to 2030. The used car shipment was recorded at 120.3 million units in 2021. The market has witnessed significant growth in the last few years as the price competitiveness among the new players has been one glowing spot in the used car industry. The inability of customers to buy new cars became one of the reasons for the growing used cars sales volume, which is complemented by the investments made by the industry participants to establish their dealership network in the market. These dealership networks helped market participants to brand and make used car options viable.

Further, the role of online sales has become a critical growth factor in the market. Online sites in auto marketplaces have played an essential role in bringing access to consumers with a single touch. A combination of such developments created a significant upsurge in the demand for used cars. In addition, the factors such as affordability, the availability of used cars, the hike in the need for personal mobility, and the emergence of various online players to organize the market have resulted in the growth of the market growth. For instance, in 2019, Ebay Inc. launched a new eBay Motors application to enhance the used car sale and purchase process online.

Until recently, automobile manufacturers and dealers have mainly focused on their new vehicle business with the exclusion of used cars, often viewed as a byproduct. However, the competition in the market and the threat of new entries have created a great extent of an upsurge in the used car dealership. Moreover, the added quality and reliability of used cars changed the consumer attitude and increased the sales of the used passenger cars. Investing in used car management has become one of the market's requirements characterized by a slimming margin, relentless competition, and demanding consumers.

Technological advancements such as the development of the internet and the introduction of hybrid and electric vehicles have changed the buyer position in the market. Moreover, consumers are now knowledgeable about the vehicle, their residual value, quality finance charges, availability, the price applied, and sometimes, the profit margin that the seller makes in a closing deal. This knowledge has changed the dynamics and managed to turn customer intelligence to their advantage. Resultantly, consumers are more inclined toward buying used cars nowadays.

Some of the key factors including transparency and symmetry of the information among the consumers and buyers, the online sales channel growth, certified used vehicle programs, and the strong position of franchise dealers play a vital role in driving the market for used cars. Various leading companies have set up online and offline stores worldwide to offer seamless used car buying experiences. For instance, in September 2020, AutoNation Inc. expanded its pre-owned vehicle store and opened two new stores in the USA Denver market. The organization also announced its goal to open 130 AutoNation Inc. stores in operation across the USA by 2026.

In both developed and developing countries, the used to new vehicle ratio has increased in the last few years, accounting for the reasons stated earlier. In addition, franchised dealers with support from OEM involvement in certification and marketing programs, online inventory pooling, and access to high-quality contracts are in a strong position to benefit from the growth in the market.

The COVID-19 (Coronavirus Disease) pandemic has placed the automotive industry at great disruption. In the aftermath of the pandemic, the consumers are expected to prefer private conveyance. However, the financial disparities are expected to hamper the purchase of new vehicles and due to budget constraints, commuters are expected to opt for the used cars. Further, virtual reality, online, or digitally generated sales leads buy new vehicles in this pandemic period.

Due to the pandemic, hybrid and electric vehicles are expected to battle in the market for the next two or three years due to the current economic conditions. Though the pandemic's impact on the automotive market will augment the demand for mid-size vehicles, quality compacts are expected to complement the same. On a bigger scale, in developing countries, the pandemic is expected to be a reason for the comeback of some entry-level used compact cars in the market. The market is also expected to vary with the demand from different segments of customers as every class segment has its own preferences regarding opting for a vehicle.

Vehicle Type Insights

The conventional vehicle segment accounted for a share of over 40.0%, in terms of shipment, in 2021. The electric vehicle segment is expected to register a significant CAGR over the forecast period, complemented by the hybrid vehicle. In the last few years, used electric vehicle prices continue to remain viable for consumers, and this plays a significant driving factor for electric vehicle sales. According to the last few years' price analysis, used electric vehicles' prices have been lower than the used hybrid vehicles. Electric vehicle traits such as technology-driven performance, in the luxury vehicle segment, provide a status symbol and support sustainability, thus creating a significant volume demand for used EVs.

Conventional gasoline vehicles with large inventory offer multiple choices at an affordable price. This segment of vehicles accounted for the maximum share in all sizes, including compact cars, mid-size, and SUV cars. Further, growing concerns over climate change and increasing pollution have created a great demand for a substitute for conventional gasoline vehicle. Hence, there has been significant growth registered by the electric used cars in the market.

Vendor Type Insights

The organized vendor segment accounted for the largest volume share of over 70.0% in 2021. This is attributed to the increasing number of franchised dealers in the market. The entry of new players in the market and new retail models also emerged as a key factor in fueling the growth of the market. According to the NADA, in the U.S., franchised dealers earned higher gross profits on used vehicle sales than independent dealers. In addition, the organized vendors benefited from greater consumer loyalty to the brand across all age groups.

The organized vendor segment is expected to witness high growth over the forecast period. The segment is accepted to hold more than two-thirds of the market in the coming years. With many dealers across the globe, the market is highly fragmented. However, in developed countries such as the U.S., Germany, and the U.K., there are some top dealers such as CarMax Business Services, LLC and Asbury Automotive Group that account for more than half of the volume share in the market.

Fuel Type Insights

The petrol segment accounted for the largest volume share of over 40.0% share in 2021. This is attributed to the declining usage of diesel vehicles as the government discourages the purchase of used diesel vehicles. The others segment is expected to witness significant growth over the forecast period. In developing countries, CNG powered vehicles have also shown a sustainable upsurge in used vehicle volume sales.

Emission standards for the positive ignition (gasoline, NG, LPG, ethanol) and compression ignition (diesel) vehicles have become one of the reasons for the slump in sales of diesel vehicles. Moreover, excessive emission of NOx by the diesel engine can be attributed to the decline in diesel engine vehicle sales and an increase in the substitute market. The petrol-fueled car emission standard is less stringent compared to diesel-fueled passenger cars. Furthermore, petrol cars with a refined engine, decent fuel efficiency, and strong top-end performance attracted a large consumer base in the last few years and are expected to continue with the same in the coming years. In addition, increasing inventory for petrol-based SUVs became one of the driving factors of the petrol segment.

Size Insights

The SUV size segment accounted for the largest volume share of over 35.0% in 2021. With the changing landscape in the automotive market, the SUVs segment has caused the downfall of other segments. Offering space and size while remaining compact compared to off-road vehicles, SUVs are considered ideal drives by buyers nowadays in various regions. With great demand and a wider supply network, residual value for SUVs is higher nowadays for the market. The European region has witnessed significant demand traction for the used SUVs market.

The compact size segment is expected to register a significant CAGR over the forecast period. This is attributed to people's preference for economical and compact size vehicles. Compact size vehicles with a high production rate and huge inventory have been preferred among the franchised owners. Easy availability with affordable prices fueled the demand for the used compact vehicle in the last few years. However, with the changing consumer preferences and advancements in SUVs, the used SUVs have shown significant growth and this is expected to continue in the coming years. 

Sales Channel Insights

The offline sales accounted for the largest volume share of over 75.0% in 2021. This is attributed to the consumer preference for the conventional mode of buying. However, the online sales channel segment is expected to witness significant growth over the years. The development of online tools for sellers and buyers has made the market more competitive. In addition, the online availability of information including prices, reviews, and specifications leads to significant growth by dealers.

Online dealers are empowering digital, savvy customers with complete end-to-end purchasing capabilities, unique delivery options, and extensive vehicle photos and data with search tools. With the usage of technically advanced tools integrated with artificial intelligence and machine learning technology, dealers are booming their network and customer base. AI applications can evaluate the data stored in the dealer management system and aid in refining the marketing and sales strategies by modifying the car buying experience. For instance, the use of online sales channels such as Alibaba.com, eBay, CarMax, and mobile.de play a vital role in country-specific growth in the market by targeting the domestic customer base. Various online channels modify their platforms to offer seamless car selling and buying experiences. For instance, in December 2020, Asbury Automotive Group announced the launch of its end-to-end digital retailing solution called Clicklane to create a great used car online shopping experience.

Regional Insights

Asia Pacific accounted for the largest share of over 35.0% in 2021, in terms of shipment, majorly due to the rapid growth of demand in China for used vehicles. Asia Pacific is projected to expand at the highest CAGR over the forecast period. This is attributed to the increasing sales of the used car in China, India, and other Asian countries. The North American region held a notable market share in 2021 and is expected to witness steady growth in the years to come owing to the plummeting growth in the past few years.

In the Asia Pacific region, with the rising number of organized players with used car trading services, China has expanded its market footprint in the Asian market. Some Indian car dealers provide a rich array of advanced technology-enabled tools, which include mobile-based applications, a virtual online showroom, cloud services for lead management systems, tracking sales performance, and digital marketing support. Moreover, this extent of advancement in the Indian used car industry creates great opportunities for the consumer base. Within the region, Indonesia, Malaysia, Indonesia, South Korea, and other developing countries have shown significant potential for the market.

Key Companies & Market Share Insights

The key players in the market are focusing on expanding the customer base to gain a competitive edge in the market. Thus, vendors are taking several strategic initiatives, such as collaborations, acquisitions & mergers, and partnerships. For instance, in 2020, Volkswagen announced a major investment in the market for used cars by a collaboration of its own used-car chain, Das WeltAuto, with various used car platforms. Mainstream automakers have also been expanding their presence in this space with their pre-owned car sales networks like Maruti Suzuki's True Value, M&M Mahindra's First Choice Wheels, and Toyota's U Trust. Some prominent players in the global used car market include:

• Alibaba.com

• Asbury Automotive Group

• AutoNation Inc.

• CarMax Business Services, LLC

• Cox Automotive

• eBay Inc.

• Group 1 Automotive Inc.

• Hendrick Automotive Group

• LITHIA Motor Inc.

• Scout24 AG

• TrueCar, Inc.

Used Car Market Report Scope

Segments Covered in the Report

This report provides forecasts for revenue and volume growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global used car market report based on vehicle type, vendor type, fuel type, size, sales channel, and region:

• Vehicle Type Outlook (Shipment, Million Units; Revenue, USD Billion, 2017 - 2030)

  • Hybrid

  • Conventional

  • Electric

• Vendor Type Outlook (Shipment, Million Units; Revenue, USD Billion, 2017 - 2030)

  • Organized

  • Unorganized

• Fuel Type Outlook (Shipment, Million Units; Revenue, USD Billion, 2017 - 2030)

  • Petrol

  • Diesel

  • Others

• Size Outlook (Shipment, Million Units; Revenue, USD Billion, 2017 - 2030)

  • Compact

  • Mid-size

  • SUVs

• Sales Channel Outlook (Shipment, Million Units; Revenue, USD Billion, 2017 - 2030)

  • Online

  • Offline

• Regional Outlook (Shipment, Million Units; Revenue, USD Billion, 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • France

    • Spain

  • Asia Pacific

    • China

    • Japan

    • India

  • South America

    • Brazil

  • Middle East and Africa (MEA)