The demand for used cars in Mumbai and across other Indian cities is at the record high. In fact, the last few years have seen an unprecedented growth of 30 percent annually in the used car segment. While, there is no doubting a fact that lower cost, pre-certification, easy availability, good condition, reliability and multiple financing options have comprehended the demand, the magnitude of growth has caught many by surprise. Even the leading car manufacturers are surprised by this ever increasing demand in the resale car industry.
As per the research conducted by CRISIL for every 100 new cars sold in India, there are 220 buyers for used cars. The used cars in Mumbai and other leading towns have now dedicated market for themselves and have emerged as a viable business option for the auto industry. Here are the prominent reasons for the stupendous growth and bright future prospects of used car market.
#1: Reduced Holding Period
The changing technology and the ever changing human desires have meant that the holding period of new cars has reduced by 50 percent. This means that the buyers, who earlier held on to their cars for 8 to 9 years, now change car every 4 to 5 years. This has led to increased supply of used cars in the retail market. Furthermore, the increased supply has resulted in stagnant cost. Thus, the used car buyers are able to get best cars at an average discount of 40 percent.
#2: Rising Aspirations
The another reason why used car market is making headwinds is because of the rising aspirations of youth. People today want to have their own car to travel. They are both image as well as status conscious. They do not mind spending a little extra to upgrade from 2 wheelers to a car to maintain their social standing. Having a car also adds up to individuals’ professional standing.
#3: Easier Finances are Fueling Growth
Gone are the days when people had to stand for hours or days together to get their loans sanctioned. These days in the world of e-commerce, used car buyers just have to log on to bank or financial institutes website and apply for their car loans with EMI on the go. This is not all; buyers today can compare the best car loan options across different lenders from the comfort of their homes or office or on the move and decide on the offer that:
- Provides lowest rate of interest
- Processing fee waiver
- No prepayment charges
- Flexible payment options and
- Other value added services
#4: Certification with Warranty
Last but not the least, certification has been instrumental in enabling the used car market to touch new highs. People are no longer worried about the authenticity of the resale cars since these come pre-equipped with warranty, 100 plus checkup and certification. What’s more, the refurbished parts are also easily available. This means that the buyer just needs to arrange for some down payment, make the booking and drive home that elusive dream used a car.