Highlights
- The global used car market is projected to reach nearly USD 3.8 trillion by 2030.
- Rising consumer demand for SUVs reflects evolving lifestyle needs and heightened environmental awareness.
Market Growth and Overview
The global used car market generated about USD 2 trillion in 2023 and is forecasted to grow at a CAGR of 8.9%, reaching nearly USD 3.8 trillion by 2030. Growth is driven by increasing internet access, online vehicle platforms, demand for off-lease vehicles, and car subscription services. North America leads with 32.8% of shipments, supported by strong demand for SUVs and pickup trucks, while the Asia-Pacific region is the fastest-growing market, led by China and India’s rising incomes and urbanization. Europe also shows steady growth, aided by incentives for environmentally friendly vehicles.
Vehicle Types and Consumer Preferences
SUVs are the most popular segment globally due to their versatility, safety, and spaciousness, followed by sedans, pickups, and crossovers. Hybrid vehicles are gaining traction for fuel efficiency, while electric vehicles (EVs), though a smaller market share, are gradually increasing thanks to technological advances and government incentives. Consumer choices are influenced by affordability, brand loyalty, and concerns over sales practices, with many buyers favoring certified pre-owned programs for reliability and warranties.
Pricing and Supply Trends
Used car prices surged in recent years due to limited new vehicle production and supply chain disruptions, remaining significantly above pre-pandemic levels despite some recent softening. Inventory shortages persist, especially in lease returns and trade-ins, maintaining competitive pricing. Supply recovered somewhat in early 2024 but remains tight, with overall volumes slightly below pre-pandemic norms. Elevated interest rates around 14% have increased financing costs, impacting affordability and consumer demand.
Technological and Regulatory Impact
Digitization and artificial intelligence are improving dealer operations and customer experiences, enhancing transparency and efficiency. Advances in EV technology and infrastructure support growing EV adoption, though challenges remain in used EV supply and subsidy reductions. Government policies worldwide aim to reduce emissions, offering subsidies and incentives for electric and hybrid vehicles, which influence market composition and accelerate the transition to cleaner transportation.
Challenges and Market Outlook
The market faces inventory shortages caused by chip deficits and pandemic disruptions, alongside concerns about unethical sales practices. Despite these challenges, demand remains strong, particularly for SUVs. The supply of used cars is expected to stabilize but stay below pre-pandemic levels into 2025. Increasing lease returns may ease supply constraints and put downward pressure on prices. The shift toward EVs is a key trend, supported by government policies, though gasoline and diesel vehicles will continue to dominate near-term market share. Consumers are advised to stay informed and cautious amid ongoing price volatility and evolving market conditions.
The content is provided by Avery Redwood, Scopewires
