The ratio of used cars to new cars sold in India is 1:1

Used car sales in India have been at par with new car sales since a few years now (refer 2012 article). The ratio of used cars sold to new cars in India is 1:1 while the ratio in some developed countries is almost 3:1 in favour of used cars, as per an article in ET Auto. Frost and Sullivan - a market research firm, expects sale of both new and used cars in India to be 25 lakh units each in 2014.

High inflation as well as interest rates have resulted in struggling new car sales. Nearly 17% of first time car buyers (vs 4% in 2011) are now opting for used cars over new ones either due to financial constraints, economic uncertainties or the sheer aspirational value of owning a premium (pre-owned) vehicle over a new car belonging to a lower segment.

Pre-owned cars certified by OEMs and backed by warranty have now begun catching the fancy of used car buyers. Maruti's True Value (used car division) recorded a 36% growth in the first half of 2014; Toyota's UTRUST grew by 20% over the past few years. The story at Mahindra is no different - Mahindra First Choice grew by 20% year-over-year; in comparison, its new car market grew by ~5% in this fiscal.

Renault among other manufacturers is also planning to enter this lucrative organised used car industry after seeing its high growth potential. Hyundai, Honda, BMW, Audi and many other manufacturers today have already begun their used car divisions. The used car industry which has grown by 15%. In 2012, the organised used car industry captured only 11%, while C2C (consumer to consumer) captured 60% of the total used car market and the remaining 28% was enjoyed by friendly neighborhood brokers.

Cars are a depreciating asset and after a few years of ownership, good examples can go for only a fraction of their original cost. At Team-BHP we have always loved the concept of used cars as they offer sheer bang for your buck. Enthusiasts too have several options to choose from in the used car market, without breaking a bank. If you are looking to buy a used car to go through some of these very useful articles too:

Article: How to buy a *USED* car in India

Article: Buying a New Car vs Used Car

Article: The Beauty of Lateral Upgrades

Article: The Best (used) Enthusiast cars for 6 lakh! Or less