India's used car market hits 5.9 million units as SUVs, premium models fuel growth
- IBEF
- November 14, 2025
India’s pre-owned car market expanded to 5.9 million units in FY25 and is projected to grow at a 10% Compound Annual Growth Rate (CAGR), reaching 9.5 million units by 2030, according to the seventh edition of the Indian Blue Book by Mahindra First Choice and Volkswagen Certified Pre-Owned. The report attributes this growth to rising aspirations, increasing Sport utility vehicle (SUV) demand, and a rapid shift toward organised players. SUVs and compact SUVs now account for over 50% of used car sales, up from 23% four years ago, while average prices have climbed 36% as buyers upgrade to newer, safer models. Vehicles aged four to seven years now dominate organised sales at 30%, with non-metro markets emerging as strong growth hubs. Brand loyalty and buyer confidence are also deepening, with 70% of customers preferring organised dealers for transparency and certified offerings.
The report highlights that warranty coverage influences 66% of purchase decisions, reflecting evolving consumer expectations. Artificial intelligence (AI) and digital tools, currently used in only 6% of sales, are expected to see wider adoption. Exchange programmes at new car dealerships now contribute 41% of supply, supported by Original Equipment Manufacturer (OEM)-certified channels. With the vehicle scrappage policy creating new supply streams, India’s used car market is evolving from fragmented and affordability-driven to aspirational, formalised, and digitally enabled.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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