Annual used-car sales are projected to reach 9–10 million units by FY31.India’s used-car market is projected to reach about $70 billion by FY31, from about $35 billion in FY26, according to the latest report by Redseer Strategy Consultants.
The report said India is the fifth-largest used-car market and could become the third-largest by the end of the decade, behind the United States and China. Growth is linked to income levels, replacement cycles and an increase in the number of vehicles, which is expected to exceed 50 million by FY31.
Annual used-car sales are projected to reach 9–10 million units by FY31. Average selling prices are estimated at ₹6.5–6.9 lakh. Around 280 million households are expected to be able to purchase a used car by that time.
A shift in ownership cycles is expected to increase supply in the resale market. Replacement periods are projected to decline from 7–8 years in FY21 to 4–5 years by FY31.
“India’s used-car market is undergoing a fundamental transition from an informal, price-led space to a far more structured and trust-oriented mobility ecosystem,” said Kushal Bhatnagar, Associate Partner, Redseer Strategy Consultants.
“Shorter replacement cycles, rising incomes, and improved access to financing are collectively expanding both supply and demand in a sustained manner. What is particularly significant is the shift in consumer mindset. Used cars are no longer being chosen merely as an economical alternative born out of compulsion, but are increasingly being preferred for value optimisation, assured quality, and the convenience offered by organised platforms,” he added.
Unorganised segment continues to dominate
The report said about 80 per cent of transactions remain unorganised. Around 50,000 dealers sell 4–6 vehicles a month, with limited inspection and refurbishment processes.
About 65 per cent of buyers are first-time car owners. Financing penetration is projected to reach 30–40 per cent.
The used-to-new car ratio is estimated at 1.3–1.4 and is projected to reach 1.6–1.7 by FY31.
The report said companies offering end-to-end services across sourcing, refurbishment, pricing, sales and financing are expected to account for 5–6 per cent of the market and about $4 billion in gross merchandise value by FY31.
