Cars24 and Bajaj Finance partner to provide financing to used car buyers

Cars24, a leading e-commerce platform for pre-owned vehicles has collaborated with Bajaj Finance Ltd., to lift the veil from used car financing and facilitate a quick, frictionless and streamlined shopping experience.

This move follows a Series G funding round announced in December 2021 where the firm raised $400 million at a $3.3-billion valuation. While the consumer demand for pre-owned vehicles is skyrocketing, the consumer financing penetration in the Indian used cars industry stands at only about 15 per cent. Realizing the key role financing plays when investing in a car, Cars24 and Bajaj Finance Ltd., are enabling consumers by improving their financial flexibility and providing greater accessibility of owning a car.

“Cars24 is poised to rewrite the industry rules. We are on a mission to fulfil the dream of more Indians to own a car by focusing on delivering a fully seamless financing solution to our consumers,” said Ruchit Agarwal, co-founder and CFO, Cars24. “In this process, we are sure our partnership with Bajaj Finance Ltd. will prove to be a perfect product-market fit. Cars24, along with BFL, is putting the consumer first when it comes to financing used car purchases- all combined with ease of use, highest quality customer experience and transferring control back to the consumer.”

Cars24 Financial Services Pvt Ltd, a wholly-owned subsidiary of Cars24 Services Private Limited, offers car lending to used car buyers making lending simpler, safer, faster, and more accessible.  This mutually beneficial partnership will lead to increased penetration in the used cars industry and enable consumers to get Cars24’s hassle-free customer experience with the financial solutions of Bajaj Finance Ltd.

“Providing easy and accessible finance solution is at the core of Bajaj Finance. This synergic partnership promotes the idea of finance for used cars to a larger audience. We believe, there is huge potential in the used car segment and the right financial solutions will only help customers make the right decision in exploring this option,” said Anup Saha, Dy. CEO Bajaj Finance Ltd. “Customers can now expect a completely seamless buying experience, coupled with quick approvals, minimal documentation and other value-added services and offers.”

Cars24 competes with players such as Droom, Ola, CarDekho, CarTrade and Spinny who are also betting on the used car market. India’s used car market will grow at a compound annual growth rate (CAGR) of 11 per cent to log sales of up to 8.3 million units by FY26, according to consulting firm RedSeer, marking a trend of people preferring personal vehicles for travel in the coronavirus.

The pre-owned car market is set to more than double to 8.2 million units or $47 billion over the next five years ending FY26 from 4 million in FY21 or $17 billion, which means that two used cars will be sold for every new car sold, according to a report by investment banking firm JM Financial. The used-car market was 4.4 million units worth $19 billion in the pre-pandemic FY20, according to the report that also forecast a clear highway for the used-card market driven by the pandemic-induced demand for personal mobility and affordability because after the BS-VI implementation cost of new cars has been on an upswing.