India’s automotive sector is certainly changing, and the used car market is at the forefront of this change. According to a new report by CRISIL Ratings, used car volume growth is expected to be 10% in FY25, which indicates a strong recovery and an increased desire for pre-owned vehicles within the market.
This is evidence of larger trends in value for money, digitalization, and changing attitudes towards vehicle ownership in India, as more consumers are opting for affordable mobility. The fact that the used car volume growth for FY25 is 10% shows how important the second-hand market is to the progression of the sector.
What Is Fueling 10% Used Car Volume Growth for FY25?
1. Affordability in Uncertain Times
Economic uncertainty and an increase in living costs have made Indian consumers reconsider purchasing large items. Increasing numbers of potential buyers are choosing to purchase a used car. Vehicles now offer value for money; it was most likely going to be a budget purchase either way, and a used car allows buyers to keep a more controlled budget while adding features and safety.
This shift in mindset is also contributing heavily to the used car volume growth of 10% FY25.
2. Digital Platforms Simplifying the Buying Journey
The advent of online automotive marketplaces and apps has revolutionized the way people buy and sell used vehicles. Trusted platforms provide certified cars with clear pricing, financing, and even door delivery options.
The frictionless digital experience is driving even more consumers (especially millennials and first-time buyers) toward used vehicles, and is part of the reason for significant used vehicle volume growth in FY25.
🚙 Trusted Brands with Certified Vehicles Establish Buyer Confidence
Certified pre-owned vehicle programs have brought a degree of trust to the used vehicle ecosystem that had not existed previously. Brands are now also including multi-point inspections, warranties, and return policies for a sense of security.
Through this definition of the used vehicle industry, the opportunity for growth now extends to Tier-II and Tier-III cities, and buyer confidence will continue to advance the possibilities of volume.
💰 Financing and Insurance Propelling Market Growth
Used car financing in India is growing at breakneck speed. Financing penetration was under 20% and is now close to 35% in the organized space.
There are banks and NBFCs now launching new loan products for used vehicle buyers with flexible EMIs, lower down payments, and quicker disbursements. This access to finance will also be another key contributor to the expected used car growth in volumes (10% FY25).
🔮 Trends Changing the Pre-Owned Vehicle Landscape
📉 Depreciation Benefit
Used vehicles depreciate significantly more slowly than new cars. Today, consumers are fully aware that a 2- to 3-year-old vehicle has nearly identical performance characteristics and features compared to a new one, but costs substantially less and with a lot less depreciation risk, too.
🚘 Subscription and Buy-Back Offers
In order to service buyers who prefer flexibility over ownership, a number of used car platforms that have launched subscription plans, leasing models, and guaranteed buy-back terms have become popular with consumers. This will increasingly appeal to younger, urban customers, as well as those who use a vehicle for short-term/seasonal needs.
⚡ Entry of Electric Vehicles into the used car market
As the in-country EV objective grows, more and more EV adoption in India is escalating, the vintage electric models are now filtering into the second-hand market, where buyers are cautiously looking at used EVs primarily for metropolitan commutes and shorter distances.
🛵 The Used Two-wheeler market is also gaining momentum
Although cars have been the major discussion point, there is also a massive pre-owned two-wheeler area in India that is experiencing significant growth. The used bike and scooter market is flying off the shelves and is being driven largely by demand from gig-economy workers, students, and delivery employees.
The growth of bike resale platforms, online documentation and ownership transfers, and vehicle inspections makes the process of leasing and purchasing second-hand two-wheelers much more reliable.
⚠️ Issues Still to Address
While growth in the used vehicle or pre-owned vehicle market is present in India, there are also challenges:
- Smaller local markets continue to be dominated by unorganized dealers, creating challenges due to limited visibility and transparency.
- Inconsistent documentation processes can often make vehicle ownership transfers cumbersome.
- Financing options remain limited, especially for categories like used bikes and older cars, restricting access for many buyers.
Most of these issues are being addressed through new-age platforms, automotive tech start-ups, and at a policy level with formalised regulations, as more attention is given to used vehicles.
The Forecast: What’s to Come
- Used car sales are expected to exceed 6 million units in FY25.
- The market share of organized players is projected to rise from 25% to 30% by 2026.
- A new-to-used car sales ratio of 1.5:1 indicates the growing dominance of the pre-owned segment.
- In top metro cities, digital-first car transactions are anticipated to account for over 40% of used vehicle sales.
These statistics reinforce the 10% FY25 volume growth 10% FY25 forecast and highlight the segment’s growing footprint in India’s broader mobility landscape.
Wrap Up: A New Era of Mobility in India
The Indian auto industry is transforming – not so much with electric vehicles and intelligent features, but a wholesale reconsideration of ownership behaviour. The used car volume growth 10% FY25 forecast is more than just a statistic – it represents the shifts in consumer behaviour and growing digital trust, while also reflecting a maturing market.
As affordability, technology, and convenience shape the vehicle-buying trajectory, the used car market is not only keeping pace but leading the finish line.
Whether for first-time buyers, value-respecting commuters, or individuals and families looking to upsize with efficiency, the used car segment represents a thoughtful and flexible option to consider.
