Prices of used cars ‘artificially inflated’: First-time buyers find new cars ‘value for money’ - Report

In what may be a major shift for the passenger vehicle industry in India, a new survey has revealed that nearly eight out of ten first-time car buyers are now considering buying a new car rather than a used one.

According to data released by auto research platform Park+ Research Labs, 77% first-time buyers now opt for a new car.

This is the opposite of what industry executives believed until a few months ago. For instance, a survey by CARS24 in January said that the used car market in India is likely to cross the one crore sales mark by 2030. It added that the demand for such cars is rising across both big and small towns.

However, Park+ said that out of 9,000 people it surveyed, 81% said that the prices of used cars are artificially inflated, mainly due to a large number of unorganised players.

“New cars are increasingly viewed as providing better value for money due to the increase in financing options and enhanced after-sales support,” it said.

The survey also noted that around 65% of the buyers who looked into used cars ultimately gave up, citing bad experiences, which included everything from RC transfer delays and legal issues to unfavourable word-of-mouth and internet reviews.

Used-car companies shift focus

In the past few months, several used-car companies have either shifted their revenue models and entered new spaces or scaled down their operations to meet the falling demand.

In 2023, CarDekho announced the shutdown of its used car retail business. It now focuses on other segments like financing and insurance using platforms like Rupyy and InsuranceDekho.

Cars24 has entered the new car space by launching a digital platform to provide all details about the cars.

Another startup, Spinny, recently launched its NBFC arm, Spinny Capital. Before that, it also acquired the auto and media car content platform Autocar India.