The change in the landscape of India's pre-owned car market emerges as nothing less than a revolution. Cost-conscious Indian consumers are predisposed toward and flocking to automatic transmission vehicles and electric vehicles (EVs) compared to their older models in comparison with traditional new cars.
The shift marks a notable divergence from the historical trends and indicates the changing priorities of consumers in the fifth largest automobile market in the world.
The Rise of Automatic Transmissions
For several decades, manual transmission vehicles have advocated fuel efficiency and lower maintenance, making them prevalent on Indian roads. However, the trend has undergone a decisive turn in favor of automatic transmissions in the pre-owned segment, especially in metropolitan cities, over the last few years.
"The demand for used automatic cars has nearly doubled in the last three years," notes Rajesh Sharma, CEO of CarTrade, a leading online automobile marketplace. "Urban consumers, especially those navigating daily traffic congestion, are willing to pay a premium of 15-20% for the convenience of automatic transmissions."
The demand for automatic cars is certainly rising among younger customers -"those aged 20s to 30s-who put driving comfort at a much higher priority than manual transmission slight economy advantages," added the extensive range of affordable automatics made available by Maruti Suzuki, Hyundai and Tata Motors.
Data from the online classifieds platform OLX Autos indicated a 45% increase in search queries for automatic vehicles, year-on-year, in 2024, with Bangalore, Mumbai, and Delhi NCR topped the search lists.
The Electric Revolution in the Pre-owned Space
Perhaps more surprisingly electric vehicles develop a specific niche within the used-car market in India. Pre-owned electric vehicles have not been receiving much notice in the Indian automotive topography. They are turning weathered enough to attract buyers from the environmentally conscious yet price-sensitive segment to entry-level electric mobility.
Price depreciation on used EVs compares abated to 30-40% from the new ones, reportedly implying lower prices for middle-class city dwellers who want to shift to more green modes of travel without paying for upfront.
Novel Financing Innovations
These changing preferences are noted by financial institutions, which responded by introducing loan products. A few banks have introduced special auto financing for used cars, particularly for automatic and electric vehicles, although with slightly lower interest rates charged for EVs, as they want to promote their use.
Further, digital-first lenders have simplified the process of application, delivering quick approval turnaround times with flexible repayment options, thus getting into the hands of many users of pre-owned automatics and EVs.
Future Outlook
As per the industry forecasts, the percentage of automatic transmission vehicles sold in used car transactions in India will increase to nearly 35% by 2027 from approximately 17% by 2024.
Moreover, electric vehicle inclusion in the pre-owned segment is also projected to be modest at a growing 8-10% of the total pre-owned marketplace during the same period, considering advancements in charging infrastructure and battery technology.
"The trajectory is clear," concludes Sharma. "As original equipment manufacturers continue introducing more automatic and electric models, their presence in the pre-owned market will naturally expand, creating a virtuous cycle of accessibility and adoption."
In general, the revolution in the Indian used car market brings evidence of changing customer preferences but also points to a more extensive change in the way most Indians view and use personal transport systems. As the population heads towards urbanization and environmental concerns emerge, the population is certain of a steady migration towards more convenient and sustainable mobility options in the pre-owned space.
For prospective customers trying to adjust to this emerging scenario, diligent homework and professional inspections will still be imperative, especially when venturing into the relatively uncharted territory of used EVs. But with proper due diligence, India's transforming pre-owned car market is making it possible to access unparalleled operational convenience, sustainable use, and future readiness at excellent price points.
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