India's used car mkt hits 5.9 mn units as SUVs, premium models fuel growth

India's pre-owned car market is expanding fast as buyers prioritise SUVs, safer models, trusted brands, and certified dealers - signalling a shift from affordability to aspiration in FY25

India’s pre-owned car market touched 5.9 million units in FY2024-25 and is projected to grow at a 10 per cent compound annual growth rate (CAGR), reaching 9.5 million units by 2030, according to a report.

 

The 7th edition of the Indian Blue Book — the annual report developed by car&bike by Mahindra First Choice and Volkswagen Certified Pre-Owned — tracks buyer sentiment, market shifts, and technologies shaping the future of mobility.

 

It shows that the country’s second-hand car market is rapidly formalising, driven by rising consumer aspirations, demand for SUVs, and growing trust in organised players.

 

The share of SUVs and compact SUVs in the used car segment has surged to over 50 per cent, up from just 23 per cent four years ago, highlighting a decisive shift toward premiumisation. Average selling prices have risen by 36 per cent during the same period, as more customers upgrade to newer and safer vehicles. 

The 4–7-year old vehicle category now accounts for 30 per cent of organised used car transactions, while non-metro markets have emerged as strong growth engines — with 68 per cent of buyers indicating plans to repurchase a used car. Brand loyalty is strengthening too, with 42 per cent of customers saying they would buy the same brand again.

 

Over 70 per cent of customers now prefer organised dealers for their transparency, service quality, and certified products. Cars with strong residual value and build quality — particularly from Volkswagen, Skoda, and Honda — are in highest demand. 

“Indian consumers today are more informed and discerning. They seek vehicles that offer proven safety, reliability, and performance,” said Nitin Kohli, brand director, Volkswagen India. “Our certified pre-owned business has become a key growth driver, reflecting this shift in customer priorities.”

 

Echoing the sentiment, Mohammed Turra, MD & CEO, Mahindra First Choice Wheels, said, “For the first time, used cars in India are driving aspiration, not just affordability. The used car is now a choice, not a fallback option.”

 

The report found that 66 per cent of buyers consider warranty coverage a critical factor in their purchase decisions, underscoring growing expectations around  quality assurance. Digitalisation and AI tools — though currently used in just 6 per cent of purchases — are set to see faster adoption in coming years. 

Dealers are also diversifying procurement channels, with 41 per cent of used inventory now coming from exchange programmes at new car dealerships. OEM-certified programmes are becoming key contributors to this supply mix.

 

With the government’s vehicle scrappage policy expected to create a fresh supply pipeline and encourage responsible upgrades, the pre-owned car market is entering a new phase. Organised players are formalising a once-fragmented sector through certified programmes, financing, warranties, and tech-driven retail formats — making the market not just larger, but more transparent, sustainable, and future-ready.