Higher Income and Changing Aspirations of Car buyers are Indirect Growth Drivers for the Indian Used Car Markets
Car market in India is made up of two parts. First is obviously the new car segment. And other is used car market.
In many developed nations, the used car markets are 2-4 times larger than new ones. But India is still far from there and people still prefer to purchase as new vehicle as their first car.
But interestingly, last few years have seen more money in hands of younger generation who have naturally had an uptick in their aspirations. They are no longer satisfied with living a simple and frugal life lived by their parents. They want to live it big. Even in case of cars, they don’t want to buy just one car in their life. Instead, they want to change it every few years.
This has become one of the key drivers for supply of used cars in India. Since young people are selling cars after just few years, these cars are naturally available in used car markets.
But that is not all. Many of these people are not hesitating in buying used cars too. Reason is that used cars can help them save several lacs if they are buying bigger cars.
Let’s take an example to better understand this. Suppose you want to buy a car with a budget of Rs 5-6 lac. Now you have two options. One is to purchase a new small car. Other is to purchase a few years old used SUV. Many people will take the second option as SUV comes with its own status and is symbolic of a better life. So if you can live a better life by just buying a used car, then there is nothing wrong in it. No doubt, you need to be careful when buying a used car. But it has its own rewards.
Purchasing a car was one of the biggest purchases for previous generations. But it is not that big a decision for current generation. And this is what is fuelling the sales of both new and used cars in India.
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