The used car market witnessed a significant boom in India ever since the Covid-19 pandemic struck in early 2020. With car production affected due to shortage in critical rare earth minerals alongside disruptions of livelihood during Covid, meant sales of new cars were severely impacted.
The outbreak of the pandemic also made people wary about public transport which boosted demand for personal mobility solutions across the different economic stratas. Hence, people had no option but to choose used cars and two-wheelers in order to fulfill their needs. This resulted in a significant boom in the used car market. However, it seems the craze for used cars has finally fizzled out.
According to a recent survey released by Park+, there’s a stark decline of trust in the used car ecosystem. The study, which captured insights from over 9,000 respondents who purchased their first car in the past year, revealed a major shift in preference. The report mentions that 77% first-time buyers will opt for a new car instead of an old or used one. Here are some possible reasons for people turning away from used or pre-owned cars.
Exorbitant high prices above market value
The survey further highlights that 81% buyers believe that used car prices are artificially inflated — primarily due to large, organized players. These prices frequently match or even surpass new car prices, even though 90% of used car transactions in India take place under the Rs 10 lakh price point. New cars are further favoured because of better value for money due to the increase in financing options and enhanced after-sales support.
Poor purchasing experience
The data further reveals that 65% of prospective used car buyers eventually gave up due to negative experiences — ranging from RC transfer delays and legal hassles to poor online reviews and word-of-mouth. Even established platforms have failed to build trust. Among key deal-breakers, 43% cited legal concerns, 22% pointed to RC transfer delays, and 11% blamed negative internet feedback.
Local dealers still a better choice
The report makes a surprising revelation stating that 73% of first-time car buyers putting their trust in local dealers over digital-first used car platforms. Buyers valued the human connection (53%), personal negotiation (31%), and transparent dealings. Meanwhile, 14% of buyers felt online platforms were impersonal, made big promises, but failed to deliver.
Legal hurdles & Lack of Transparency
The survey revealed widespread legal complications in used car transactions, with frequent mentions of fraud, ownership disputes, and documentation issues. Respondents urged the need for greater accountability, streamlined RC transfers, and standardized pricing.
