Constant vehicle upgrading
As competition is rising in the auto sector, many people are inclined towards upgrading their existing vehicle to better and feature rich vehicles. Up until few years back, people would keep their cars upto five years but now this has come down to mere three years. This drift has directly resulted in favor of used car sector where people searching for used cars have now plenty of choices to choose from. This ratio and higher supply is further changing in good turn for the used car industry.
Affordability and pricing
This is another reason of the explosion in the pre-owned car sector. As there are plenty of choices, pricing is bound to allure the newcomers. Now every middle class man can think of owning a four-wheeler car which was way back restricted only to the affluent peoples. Even a city sedan can be purchased under 1 lakh rupees which is no longer a surprise nowadays. The highest demand is seen in the used cars priced between 1-2 lakhs and more than 90 percent of people prefer to buy used car under Rs 5 lakhs.
Trends like purchasing expensive motorcycles is getting slowing as used cars can be bought 'cheap' and can be sold quickly in a few years at a good price. So, the appetite is increasing keeps growing.
Top manufacturers entering business
Almost all the major players have now entered the mainstream used car market, so people can buy certified used car from their trusted brands, which is a big relief for many as the other option was an unscrupulous dealer. Maruti Suzuki, the largest passenger carmaker and the most trusted brand in India could be quoted as the best example of this development. Maruti besides facing a flattish growth in the new car sector has garnered a large chunk of sales through its used car retailing Maruti True Value. The same True Value of Maruti with 540 outlets in 340 cities of the country has become the second largest network behind its own huge network of new cars. Company managed to sell over 2.38 lakhs used cars in FY 2013-14 which is a steep growth compared to last fiscal year. Even Mahindra and Mahindras First Choice is seeing a speedy development in this sector and intend to surpass the 1 lakh figure by 2016-17 which is over 60,000 units per annum so far. Recently, Hyundai Motors India also unified globally its used-car business under one brand name H-Promise which was earlier known as Hyundai Advantage. The move is to spread awareness, strive for satisfaction and transparency among the used car buyers. Through this platform, used car customers can also upgrade to a new vehicle at lower EMIs. Company has currently 335 outlets dispersed in 225 locations across India. And there are several such subsidiaries working across the country like Toyota U Trust, Chevrolet Certified, Tata Motors Assured, etc. The point to be noted down is that as used cars are rigorously tested even though these companies sell cars with slightly increased price tag against the local car-dealer.