Written By: Resham Daswani

Do you have a passion for cars? So why not venture into the used car business in India and make your passion for cars a business reality?  Confused? What makes us write this blog is because of the growing demand for buying and selling used cars business in India and the rate at which

The Buying & Selling Used Car Business in India in 2023

The increase in demand for used automobiles over the past year, the market for used automobiles in India is expanding. There is now a ratio of 1:2.2 between new automobiles and used cars, which is an increase from 1:1.2. 

There will be more than 70 lakh automobiles on the road by 2025–26, up from 38 lakh in 2020–21. Between the years 2021 and 2030, it is anticipated that the market will expand at a compound annual growth rate of 17.50%, resulting in $99,707 million by the year 2030.

The Hyundai Grand i10, the Maruti Suzuki Swift, and the Renault Kwid hatchbacks are the models that are selling the best in the preowned market, according to data that was acquired during the third quarter twenty-three of 2023.

Key factors driving this market are:

1. Budget Friendly and Affordable: The low cost of used cars in India is the key factor that drives the demand for used cars. Used automobiles are typically more affordable than their brand-new counterparts, which makes them an appealing choice for a diverse variety of buyers, particularly those who are in the market for their first automobile.
2. Rising Middle Class: In India, the growing number of people who are part of the middle class, along with an increase in their discretionary money, has resulted in an increase in the market for personal vehicles. Used automobiles are a solution that many people find to be both practical and cost-effective when it comes to meeting their need for transportation.
3. Use of Online Platforms & Technology: Buying and selling old cars has been revolutionised as a result of the proliferation of internet platforms and technological advancements. Consumers can browse a wide variety of options, compare costs, and make selections based on accurate information thanks to a variety of websites and mobile applications. Accessibility and simplicity in the market for secondhand cars have both risen as a result of this.
4. Depreciation of cars: In the first few years of ownership, new automobiles often undergo a large amount of depreciation. As a consequence of this, customers are frequently drawn to the purchase of used automobiles that have already been subjected to this initial value decrease, as they provide a better value for their money.
5. Economic Conditions: As a result of economic factors such as swings in earnings and job stability, consumers have been influenced to choose used vehicles that are more cheap than new ones.
6. Certified Programs: Through the provision of guarantees and assurances of quality, certified pre-owned (CPO) programmes, which are being provided by manufacturers and dealerships, have instilled confidence in consumers who are interested in purchasing used automobiles.

These are just a few of the most important factors which are enhancing the growth and demand for buying and selling of used cars in India.

So now we take you through one of the fastest-growing used cars business in India - the Cars24 franchise opportunity.

About The Cars24 Franchise Opportunity in India 2024

Among the top AutoTech companies in India, and many others across the globe, CARS24 has been around since 2015 and is completely changing the way used vehicles are bought, sold, and financed.

Thanks to CARS24's 140 quality checks and Smart AI Pricing Engine, buying and selling used cars is a breeze.

Our company, CARS24 Financial Services, is a professionally managed NBFC licenced with the Reserve Bank of India. We provide value-added services to our customers by guaranteeing complete transparency and expediting financing processes.

Their Goals & Intent:

Our goal is to bring about a sea change in the manner in which used automobiles are purchased and sold all over the world. We took this into consideration when we established our company in 2015, and since then, we have gone a long way, expanding from a single office to 205 branches spread over 182 of India's most important cities.

More than six million satisfied clients have utilised our platform since then. As well as this, we want to continue to solve problems for customers and make their lives easier and more useful by continuously innovating, expanding our collaborations, and cultivating meaningful relationships with individuals.

What You Receive By Choosing Cars24 Franchise?

• We offer our franchise partners an attractive return on investment (ROI) of up to 70%.
• When compared to other business models, ours involves relatively moderate expenditures.
• To ensure that our franchise partners receive comprehensive marketing support, we offer it.
• Training on pepper is something that we offer to our business partners.
• Exact assistance and mentoring are provided by our organisation.

Cost To Start a Cars24 Franchise in India

To start a Cars24 franchise in India, you would require an investment range of around Rs15-20 lakhs.

Future of the Used Car Buying & Selling Business Industry in India

From 2024 to 2028, the market for used cars in India is predicted to grow from 27.47 billion USD in 2024 to 55.49 billion USD in 2028, a compound annual growth rate (CAGR) of 15.10%. This upward trajectory is expected to provide a significant boost to the trends that are occurring in the automobile industry in India.

There is little doubt that the future of used vehicle dealerships will be an exciting and unpredictable ride. Taking technology as a starting point, the increasing technological improvements will clear the way for an increase in the demand for secondhand automobiles.

Additionally, the ever-increasing usage of artificial intelligence (AI) and other digital functions will continue to take the online shopping experience to a whole new level and play critical roles in the process.

In addition, drivers appreciate better communication between owners and purchasers, and the advent of authorised used vehicle programmes may bring about some beneficial changes in the future of automobile dealerships.

Some key takeaways of the used car business in India is highlighted below:

• Post the pandemic the brick and mortar dealership stores are gaining traffic and also online sales leads will continue to grow.
• The structured dealership will survive used car demand and gain market share.
• It is generally believed that the steadily increasing financial independence of employed people is the primary driver of market expansion. Consumers can purchase automobiles within their financial constraints as a result of this.
• Several factors have contributed to the enormous rise of the used automobile industry in recent years. These factors include affordability among new market competitors as well as the unwillingness of a significant number of the consumer base to purchase a new car.
• Cities like Mumbai, Delhi NCR, Bangalore, Chennai, and Hyderabad supplied 65% of used car supply in 2022–2024, with non-metro areas demanding most. Most increase will come from small areas, raising used car sales from 65% to 75% in four to five years.

How Used Car Franchises Are Preparing For The Future?

1. Home-based inventory: Your domestic inventory includes new sales, routine maintenance, and reconditioned pre-owned automobiles. This approach helps dealerships ensure a strong and top-notch pre-owned vehicle inventory and capitalise on many profit-boosting opportunities throughout the vehicle's lifecycle, starting with the original sale.
2. New Strategies of Marketing: As more people buy cars online than at dealerships, you must use new marketing strategies to reach them in their chosen digital places. A solid web presence is essential. Predictive marketing helps engage a large spectrum of potential clients.
3. Future is EV: A good prediction for EV sales in 2024 bodes well for the used car market. Innovative government policies are supporting EV sales while assuring affordability and equal access, especially for low-income households.

In a nutshell, with the arrival of OEMs and New automobile Dealerships, the used automobile market in India is undergoing a shift from an unorganised sector to a more formalised one in the year 2024.

This transformation is being driven by original equipment manufacturers. As a result of this market consolidation, there has been an increase in popularity and awareness of certified pre-owned automobiles in India.

FAQs

Q.1. Is it profitable to start a pre-owned franchise business in India?

The majority of new car dealers can make a profit of between 10 and 20 per cent when selling a pre-owned vehicle, however, when selling a new automobile, they can make a profit margin of between 2 and 5 per cent at most. It is because of this that new car dealers can enter the market for pre-owned automobiles.

Q.2. Do second-hand franchise owners make money in India?

The margin of profitability in the market for used automobiles in India can vary greatly based on a number of factors, including the overall state of the automobile, the demand for particular models, the region, and the seller's ability to negotiate. It is common practice for dealers to target a profitable margin of approximately 10–20 percent when selling used automobiles.

To Conclude,

Reach out to us at FranchiseBazar to get more of the latest automobile dealership franchises in India.

Disclaimer: The brands mentioned in this blog are the recommendations provided by the author. FranchiseBAZAR does not claim to work with these brands / represent them / or are associated with them in any manner. Investors and prospective franchisees are to do their own due diligence before investing in any franchise business at their own risk and discretion. FranchiseBAZAR or its Directors disclaim any liability or risks arising out of any transactions that may take place due to the information provided in this blog.