Global Used Cars Market to Reach USD 23.89 Billion by 2022, Driven by High New Car Costs and Subscription Services

The global used cars market, valued at USD 23.89 billion in 2022, is projected to grow at a rapid pace with a revenue Compound Annual Growth Rate (CAGR) of 15.1% over the forecast period. Key factors driving this growth include the rising costs of new vehicles, affordability challenges, and the increasing popularity of car subscription services.

Drivers of Market Growth

The high cost of new cars has been a significant factor pushing consumers toward the used cars market. Modern features that buyers expect, such as advanced infotainment systems and leather upholstery, have increased the prices of new cars. These features, once exclusive to luxury cars, are now found in mainstream vehicles, contributing to higher sticker prices.

Moreover, choosing a used car presents multiple financial advantages beyond the initial purchase price. Lower fees, reduced insurance costs, and less depreciation make used cars an attractive option for budget-conscious consumers.

Another key driver for market growth is the rise of car subscription services offered by auto dealerships, leasing offices, and franchises. These services offer a hassle-free alternative to traditional car ownership or leasing, with no upfront deposit required and all maintenance, insurance, and road tax covered. This flexibility allows consumers to switch vehicles or discontinue use without the long-term commitment of ownership.

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Challenges and Restraints

Despite strong growth, the market faces challenges from the rise of on-demand taxi services, which offer a cost-effective alternative to car ownership. These services reduce the need for personal vehicles, particularly in urban areas where parking and traffic are significant concerns. Taxis also provide convenience and safety for late-night travel, further lessening the demand for used cars.

Market Trends

A significant trend reshaping the used cars market is the growing role of e-commerce platforms. Companies like CARVANA, CAZOO, CINCH, and CARS24 allow consumers to purchase vehicles online, with delivery services bringing cars directly to customers' doors. These platforms offer convenience, price comparison, and warranties, making them popular among buyers. However, some customers still face challenges in trusting sellers or navigating the overwhelming amount of information across multiple platforms.

Segment Insights

The global used cars market is segmented by vehicle type, fuel type, and propulsion.

Vehicle Type

The sports utility vehicle (SUV) segment held the largest market share in 2022. SUVs are favored for their safety, spacious interiors, and versatility, appealing to both urban and off-road drivers. Hatchbacks, known for their user-friendly design and fuel efficiency, are also seeing rapid growth, particularly among first-time drivers and those seeking more cargo space.

Fuel Type

Petrol-powered used cars lead the market, largely due to lower after-sales maintenance costs and the affordable availability of spare parts. These vehicles are also viewed as more eco-friendly compared to diesel alternatives. On the other hand, the diesel segment is expected to register robust growth due to its superior fuel efficiency and torque, which appeal to long-distance drivers.

Propulsion

Internal Combustion Engine (ICE) vehicles dominate the market, known for their durability and longer driving range. However, the electric and hybrid vehicle segments are experiencing rapid growth, driven by government support for cleaner transportation and the low maintenance requirements of electric motors.

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Used Cars Top Companies and Competitive Landscape

The global used cars market is fairly fragmented, with many large and medium-sized players accounting for majority of market revenue. Major players are deploying various strategies, entering into mergers & acquisitions, strategic agreements & contracts, developing, testing, and introducing more effective used car solutions.

Some major players included in the global used cars market report are:

CARS24

Maruti True Value

Mahindra First Choice

TrueCar, Inc.

Lithia Motors Inc

Hendrick Automotive Group

TKM

Big Boy Toyz

Scout24 AG

AUDI AG

Group 1 Automotive, Inc.

com

OLX

Alibaba Group Holding Limited

Asbury Automotive Group

com

Autotrader, Inc

CarGurus, Inc.

CarMax Enterprise Services, LLC

eBay Inc

Used Cars Latest Industry Updates

On 12 August 2021, Mercedes Benz India announced the opening of the new Mercedes Benz Marketplace. The new MB Marketplace was intended to serve as a platform for direct-to-consumer auto sales. The German company believed that the model would offer advantages to both buyers and sellers of pre-owned luxury cars that were currently absent from the pre-owned luxury automobile market in India.

On 12 October 2022, Mexican used cars marketplace Kavak, backed by SoftBank, announced that it would be expanding to the GCC. After merging with regional player Carzaty, Mexico's pre-owned automobile platform Kavak intended to invest USD 130 million in the Gulf Cartel over the next two years to create the largest used car business in the region. A 240-point inspection was performed on every vehicle that Kavak handled before it was bought.

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Used Cars Market Segmentation Analysis

For the purpose of this report, Emergen Research has segmented global used cars market on the basis of vehicle type, channel, fuel type, propulsion, and region:

Vehicle Type Outlook (Revenue, USD Billion; 2019-2032)

Hatchbacks

Sedans

Sports Utility Vehicles (SUV)

Channel Outlook (Revenue, USD Billion; 2019-2032)

Organized

Unorganized

Semi-Organized

Customer to Customer

Fuel Type Outlook (Revenue, USD Billion; 2019-2032)

Gasoline

Diesel

Petrol

Others

Propulsion Outlook (Revenue, USD Billion; 2019-2032)

ICE

Electric and Hybrid

Regional Outlook (Revenue, USD Billion; 2019-2032)

North America

U.S.

Canada

Mexico

Europe

Germany

France

U.K.

Italy

Spain

Benelux

Rest of Europe

Asia Pacific

China

India

Japan

South Korea

Rest of APAC

Latin America

Brazil

Rest of LATAM

Middle East & Africa

Saudi Arabia

UAE

South Africa

Turkey

Rest of MEA

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