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Business News/ News / India/  Car owners are now selling off their vehicles earlier than usual: Report

Indian car owners are now looking to trade in their used vehicles with a new one earlier than they previously did, according to the IndianBlueBlook report.

The average age of a used car is now nearly 4 years, down from 4.4 years last year and significantly lower than 6 years on average a decade ago. Owners are expected to further reduce the time they hold on to their vehicle in the next five year to only 3.5 years, according to the report.

“Demand for used cars in non-metros & supply in metros is increasing due to the consumer desires and increasing trust with platforms, the organised used car market’s share is all set to increase from 20% in FY2021-2022 to 45% in FY2026-2027. As the average age of vehicle ownership decreases, there would be a steady increase in availability of used cars. Dealerships would lead towards a path of being highly profitable. This coupled with a seamless transaction and ownership experience will eventually drive future growth that is scalable", the report said.

The Indian used-car market, currently valued at $23 billion, is projected to grow at double its current rate of expansion, at a CAGR of 19.5% till FY 2026-2027, according to the report.

This could translate to annual used car sale of sales of 8 million units by FY27, it noted. An estimated 4.4 million used cars were sold in India in FY22.

“Car sellers get rid of their cars after covering distance of 70,000 kms on average, with an average vehicle age of about four years in FY 2021-2022 compared to 4.4 years in FY 2020-2021," the report noted.

“When compared to India’s counterparts in Germany, the USA, and France, India has a high percentage of used cars that are more than four years old. However, the Indian market for used cars is rising. The average car age has reduced by 33% from six years in FY2010-2011 to four years in FY2021-2022. Cars in India change hands five times during their entire lifecycle before being scrapped. The average age of a car is substantially lower in the United States, where the average number of car owners until abandonment is 10."

Alisha Sachdev
Alisha Sachdev is an assistant editor with Mint based in Delhi. She reports on the auto and mobility sector, with a special focus on emerging clean mobility technologies. She also focusses on developing multimedia properties for Mint and currently hosts the 'In A Minute' series and the Mint Primer podcast. Previously, she has worked with CNBC-TV18 and NDTV.
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Updated: 22 Sep 2022, 06:02 PM IST
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