Used Car Market is gaining traction through digital disruption

 

Used Car Market 

The used car market has evolved tremendously over the past decade driven by digitization and internet penetration. Used cars offer an affordable means of transportation for many consumers while being more economical compared to their new car counterparts. Used cars provide several advantages like lower upfront costs, greater vehicle selection, and availability of certified pre-owned models with extended warranties. Consumers can buy used cars through both offline dealerships as well as online portals offering virtual tours, vehicle history reports and financing options.

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.

Used cars remain a preferred choice for several consumers due to budget constraints and increased affordability through finance options. The growing demand for affordable mobility solutions along with increasing disposable incomes in developing countries will continue driving market growth.

Key Takeaways

Key players operating in the Used Car Market 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. Key players are focusing on expanding their physical dealership networks as well as bolstering their digital commerce platforms.

The affordable mobility options is propelling growth in the Used Car Market Demand sector. Increased preference for vehicle ownership over public transportation amid the pandemic has further accelerated used vehicle sales in recent years. Moreover, the availability of affordable financing and leasing options is increasing access to used cars for a wider consumer base.

Several market players are also exploring opportunities in international markets to leverage the growth prospects. Countries in Asia and Latin America offer high growth potential due to a rapidly emerging middle class with increased disposable incomes. Players are focusing on strengthening their presence in developing economies through strategic partnerships and M&A activities.

Market Key Trends

Digitization is emerging as a key trend in the used car industry. The popularity of online used car portals is growing rapidly as they offer increased transparency, virtual shopping capabilities and bundled financial services. Many dealers are implementing web-based solutions to digitize inventory management and enhance the online buying/selling experience. This is expected to help eliminate friction points and enable convenient doorstep delivery options. The growing penetration of internet and e-commerce will continue reshaping competition dynamics and purchase journeys in the used car sector.

Porter's Analysis

Threat of new entrants: The used car market poses a low threat of new entrants as it is a mature market dominated by major dealers and online platforms. Building a large inventory or brand recognition takes significant resources.

Bargaining power of buyers: Buyers have moderate bargaining power as there are many options available and pricing information is transparent online. However, buyers still seek trust and service which larger dealers provide.

Bargaining power of suppliers: Individual consumers selling their used cars have low bargaining power against large dealers that buy in bulk. However, some large fleet owners are able to negotiate better prices when selling in high volumes.

Threat of new substitutes: New cars remain a substitute, though used cars fill an important low-cost used vehicle need. Ride-hailing and public transport offer alternative options in some urban markets.

Competitive rivalry: Intense as major dealers and online platforms compete on pricing, selection, services.

Geographical Regions

The used car market in the United States represents the largest value share, estimated at over $250 billion in 2024 due to the large size of its vehicle parc and highways that support driving as a primary mode of transportation.

The used car market in China is poised to become the fastest growing region between 2024-2031 with expected CAGR of over 12% as car ownership increases sharply among its growing middle class. Increasingly popular used car import and export businesses also contribute to double digit growth.

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Priya Pandey is a dynamic and passionate editor with over three years of expertise in content editing and proofreading. Holding a bachelor's degree in biotechnology, Priya has a knack for making the content engaging. Her diverse portfolio includes editing documents across different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. Priya's meticulous attention to detail and commitment to excellence make her an invaluable asset in the world of content creation and refinement.

 

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