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Used Cars Market Size By Vehicle Type (Hatchback, Sedan, SUV), By Fuel Type (Gasoline, Diesel, Hybrid/Electric), By Sales Channel (Peer-to-Peer, Franchised Dealers, Independent Dealers), By End-Use (Personal, Commercial), Industry Analysis Report, Regional Outlook, Growth Potential, Price Trends, Competitive Market Share & Forecast, 2021 – 2027

  • Report ID: GMI5019
  • Base Year: 2020
  • Report Format: PDF

Industry Trends

Used Cars Market size exceeded USD 1.2 trillion in 2020 and is expected to register over 3% CAGR between 2021 and 2027. The rising vehicle ownership trend coupled with the proliferation of car dealers in countries across the globe is likely to drive the adoption of used cars.

The market is anticipated to grow during the forecast timeframe owing to a shift in car ownership patterns globally. The increasing demand for off-lease vehicles from car dealers, franchises, and leasing agencies along with the growing acceptance of car subscriptions will augment the market size through 2027. Online sales channels are further contributing to the industry growth by providing customers with easy access to used cars.

Used Cars Market

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Used cars are pre-owned vehicles that previously had one or more retail owners. These vehicles are sold through peer-to-peer, OEM, and dealership sales channels. Increasing investments by OEMs and franchised car dealers in refurbishment and maintenance of used cars are increasing their market representation.

Market factors, such as transparency of information among the buyer and the seller, online sales channel growth, and certified programs for used vehicles, are generating growth opportunities. Growing consumer preference for used cars in price sensitive markets is propelling the industry. Consumers in low income groups are inclined toward investing in affordable used vehicles that provide enhanced safety and protection to their family. The ease of purchase and lucrative financing offers provided by used car dealers have enhanced the used cars market demand.

One of the major factors hampering the industry growth is the high cost incurred for servicing and maintenance of used cars. These cars are often susceptible to damage due to wear and tear of critical parts such as gear box, engine, and motor. Used car buyers also incur significant costs in refurbishment of these critical parts, further hampering their demand in the market. Frequent servicing of used cars to mitigate the risk of vehicle breakdown also acts as a challenge to the industry.

The outbreak of COVID-19 pandemic across the globe slowed down the growth of the used cars market. Global economic crisis coupled with financial instabilities hampered the market size for the first two quarters of 2020. Severe impacts on the automotive industry during this period also hindered the market for used cars. However, post June 2020, the market witnessed a growing demand for used cars impelled by shifting consumer preference toward personal mobility. Health risks and social distancing requirements encouraged consumers to invest in affordable used cars for personal safety during the pandemic.

High demand for hatchback will support the industry

The hatchback car segment is poised to observe an upward trend through 2027 propelled by the increasing adoption of compact vehicles in various countries. In 2020, the hatchback segment held a market share of over 20% in Europe. Several features of hatchback cars, such as high roofline and compact design, along with low prices as compared to second-hand SUVs and sedans are contributing to their growing representation in the market.

High share of gasoline cars in the used cars industry

The North America gasoline segment valued at around USD 250 billion in 2020. The gasoline segment is anticipated to show the highest growth rate driven by several advantages of gasoline engines such as low maintenance and its higher revolutions per minute. Gasoline fuel is more combustible than diesel and thereby minimizes vehicular emissions. However, the market share of gasoline used cars will reduce with the emergence of alternative fuels in the automobile industry.

Increasing presence of franchised dealers across the globe will support the industry

Europe Used Cars Market By Sales Channel

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The Europe franchised dealers segment accounted for more than 50% of the used cars market share in 2020. The presence of several franchised dealers in various countries globally will support the market outlook. The franchised dealers include Maruti Suzuki True Value, Uxin Group, Fair Financial Corp., Droom Technology Pvt. Ltd., and Group 1 Automotive Inc. These companies are emphasizing on introducing online vehicle purchasing platforms to enhance their customer base.

Enhanced adoption of used cars for personal use is fueling the market demand

The U.S. personal used cars market is set to see a 3.8% CAGR from 2021 to 2027 led by the shifting trend toward personal mobility. Price sensitive consumers are highly inclined toward investing in a used car as opposed to a new one due to less capital investments. Used car dealers are integrating these vehicles with advanced technologies and in-car entertainment features.

Growing trend for organized operations is driving the market revenue in North America

North America Used Cars Market By Region

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The North America used cars market is estimated to reach above USD 550 billion by 2027. In 2020, over 37 million used cars were sold in North America. Rapid increase in government regulations supporting organized operations will contribute positively to the market revenue. Furthermore, the surging trend of digitalization with the introduction of Artificial Intelligence and Big Data in the region will support the market statistics.

Regional players including Fair Financial Corp., Vroom Inc., and Carvana Co. are focusing on mergers and acquisitions to enhance their market share and gain a competitive edge in the market. For instance, in December 2020, Vroom Inc. acquired Carstory, an AI-enabled vehicle information provider. The acquisition assisted the company to enhance its service offerings in line with the recent trends.

Digitalization trends in the market will fuel growth

Industry participants are adopting digitalization strategies to enhance the quality of their services. For instance, in June 2019, Automotive Group Inc. launched a new platform for online purchasing of vehicles in the U.S. market, AcceleRide. Through this platform, customers can communicate their requirements online without visiting the dealer in person, thus enhancing convenience for customers.

The prominent players in the used cars market include Arnold Clark Automobiles Ltd., Asbury Automotive Group Inc., CarMax Inc., Carvana, Emil Frey AG, Group 1 Automotive Inc., Lookers PLC, Mahindra First Choice Wheels Ltd., and Maruti Suzuki True Value.

This market research report on used cars includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD and shipment in units from 2017 to 2027 for the following segments:

Market, By Vehicle Type:

  • Hatchback
  • Sedan
  • SUV
  • Others

Market, By Fuel Type:

  • Gasoline
  • Diesel
  • Hybrid/Electric
  • Others

Market, By Sales Channel:

  • Peer-to-peer
  • Franchised dealers
  • Independent dealers

Market, By End-use:

  • Personal
  • Commercial 

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • UK
    • Germany
    • France
    • Italy
    • Russia
  • Asia Pacific
    • China
    • India
    • Japan
    • South Korea
  • Latin America
    • Brazil
    • Mexico
  • MEA
    • UAE
    • Saudi Arabia
    • South Africa
Authors: Preeti Wadhwani, Prasenjit Saha

Frequently Asked Questions (FAQ) :

The market for used cars generated USD 1.2 trillion in 2020 and will record a 3% CAGR over 2021-2027.

Hatchback segment held 20% revenue share of Europe used cars market in 2020 and will expand with growing adoption of compact vehicles.

Used gasoline-powered cars generated over USD 250 million in sales in North America during 2020 and will witness notable demand through 2027 due to lower maintenance.

The adoption of personal used cars in the U.S. is slated to increase at a 3.8% CAGR through 2027 with the growing trend of personal mobility.

The market for used cars in North America could reach USD 550 billion by 2027 driven by favorable government regulations towards organized operations.

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Premium Report Details

  • Published Date: Mar 2021
  • Companies covered: 18
  • Tables & Figures: 439
  • Countries covered: 16
  • Pages: 250

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