Used-car sales grow twice as fast as new ones: A buyer's advantage in 2025

The sales volume of used cars in India is expected to cross 6 million units this fiscal driven by value-conscious demand, rising digital adoption and better access to finance.

Planning to buy a car in 2025? You might want to look at the pre-owned market before you step into a showroom.

 

According to the latest report by CRISIL Ratings, used-car sales in India are growing at more than twice the pace of new ones, with volumes expected to cross 6 million units this year. That’s a sharp rise from just a few years ago and a clear signal of a structural shift in buyer behavior — especially among value-conscious, digitally savvy consumers.

 

"This has lifted the used-to-new ratio in car sales to 1.4 from less than 1 five years ago, with the volume growing more than twice as fast. The market value of these used cars is estimated to be around Rs 4 lakh crore, nearly matching that of new car sales," said the report.

 

Used vs New: The Ratio is tilting

Five years ago, for every new car sold in India, less than one used car was bought. Today, that ratio has climbed to 1.4:1, reflecting greater affordability, easier financing, and wider digital access in the second-hand market.

 

Compare that with developed markets like the US (2.5x) or UK (4.0x), and there’s still room to grow. But what’s changed for Indian buyers?

 

“Rising consumer confidence, faster upgrade cycles, and preference for SUVs have brought the average age of used cars down to 3.7 years,” says Anuj Sethi, Senior Director, CRISIL Ratings.

 

What is driving demand? 

Affordability: Used cars offer better value, especially in a market where new car prices have risen sharply post-pandemic.

 

 Supply Chain Gaps: Shortages in rare earth materials and semiconductor chips continue to delay new car deliveries. Pre-owned cars offer quicker access.

 

Financing Has Improved: AI-driven underwriting, partnerships between lenders and used-car platforms, and expanded credit options make financing easier than ever—even for first-time buyers.

 

More Inventory, Better Quality: With strong post-pandemic sales in the new car market, more recent-model used cars are now available, often with low mileage and service history.

 

What should buyers keep in mind?

If you're considering a used car in 2025, here's how to do it right:

 

1. Buy from Organized Players

Online platforms and manufacturer-backed outlets now offer inspection reports, warranties, and doorstep delivery—giving you confidence, choice, and convenience.

 

2. Check Vehicle History

Make sure the car is RC-cleared, insurance-covered, and not part of any accident or legal dispute. Ask for service records.

 

3. Get Financing Pre-Approved

Interest rates for used-car loans tend to be 1–2% higher than new car loans, but competitive offers are available for salaried professionals and buyers with good credit scores.

 

4. Factor in Maintenance

While modern cars are more durable, check parts availability and servicing costs, especially for discontinued models.

 

5. Be Open to Upgrades

With the average age of used cars now under 4 years, it’s possible to buy a top-end trim or SUV for the price of a new entry-level model.

 

"Besides, first-time buyers have a wider range of used car models to choose from, supported by healthy new car sales in the post-pandemic period. To top, improving access to vehicle finance, through lender-platform partnerships and underwriting, driven by artificial intelligence, is likely to support this shift. Strong growth has led to expansion of organised players in the used car segment even as profitability remains a challenge," said Crisil in a note.