2

FOREWORD
“The used car industry is going through a purple patch, with strong
demand expected to continue for the foreseeable future.” To capitalise on
this massive opportunity, organised players must drive trust, competitive
pricing, customer experience, and varied inventory offerings.”

I am delighted to present the 5th edition of the Similar to the previous year, 4.4 Mn used cars
IndianBlueBook(IBB) used car report for the fiscal were sold in India during FY2021-2022. This
year 2021-2022. The IBB Report has established achievement was especially commendable
itself as the most comprehensive report on the considering the disruptions and challenging
used car industry over the years, and it is widely market situation. We believe that growth would
used by analysts, practitioners, media, and continue to accelerate, with the market reaching
researchers in India and around the world. 8 Mn by FY2026-2027.

This edition of the IBB Report is special. With The report is divided into 4 sections. Part A
the changed business landscape following the discusses the major highlights of Global and
pandemic, there is a clear preference for used Indian used car markets. Parts B and C give an
cars among consumers across the country. Used in-depth analysis of the demographics, drivers,
cars, which were once considered a compromise, behaviours, and evolving preferences of Indian
are now making their way into the consideration used car buyers and sellers. The research also
set of consumers when they think about highlights emerging business models, the power
purchasing a car. This is a watershed moment, of artificial intelligence/machine learning, in
highlighting the fundamental shift that has uncovering insights, the significance of support
occurred over the last few years. provided by industries such as NBFCs/Banks/
Insurance companies, and so on.
The used car market is predominantly
“Unorganized” is a standard line used to For the first time, the IBB Report includes a
describe this industry. The unmistakable trend special section (Part D) with contributions from
since the pandemic has been that the pace of global experts on various topics, from platforms
industry organization has gathered significant to data analytics to innovative business models.
momentum. Players with various business
models, addressing various customer pain In preparing this report, we have tried to do as
points, and approaching the sector from many meticulous a research as possible to provide you
perspectives have converted the industry with validated, trustworthy, and insightful ideas
into one of India’s most promising consumer and information. This has been enriched with the
tech markets. participation of car&bike and Das WeltAuto (a
division of Volkswagen passenger cars India), for
Increasing digitization of the consumer journey which I am grateful.
has been a critical factor in gaining consumer
trust. Having said that, it is now evident that I hope that this research serves as a beginning for
the consumer journey is and will remain both further deliberations and sets the tone for future
online and offline. While most of the exploration discussions on the Indian used car industry.
and consideration phases have shifted online,
majority of the purchases continue to take place ASHUTOSH PANDEY
in dealerships and other physical touchpoints. MD and CEO, Mahindra First Choice Wheels

3
THIS YEAR’S REPORT
Sr. Particulars Page
No. No.
Foreword 3
Executive Summary 7

PART A: MARKET OVERVIEW: GLOBAL & INDIAN TRENDS

1 Used-car industry snapshot: a large, robust, 10
and untapped global market
1.1 Business expansion a key strategy for used car players globally 11
1.2 Global used car business models 12
2 Top trends influencing the used car markets 15
2.1 Cementing relationships with honesty 15
2.2 The rise in the consumer demand for online purchases 15
2.3 Consumers are embracing digital transactions 16
and value-added services
2.4 Data: a recipe for decision making 17
3 Indian used car market: the upsurge and driving trends 19
3.1 Paradigm shift in 2020 22
3.2 Indian used car business models in play 23
3.3 Evolving business trends in India 25
3.4 Primitive to evolving journey: demand and supply 26
3.5 Vehicle sourcing and used car channels 28
3.6 Easy access to financing is a key lever 29
3.7 Warranties are now a fundamental right 30
3.8 Structural issues with the Indian used car market 30

PART B: ANALYSIS OF THE INDIAN BUYERS’ MARKET

4 Features of the Indian used car buyers market 34
4.1 Rewarding experience of owning a used car 34

4
4.2 Channel preference of Indian buyers 36
4.3 The consumer purchasing behaviour 37
4.4 Used car buyer profiling 38
4.5 Key buyer personas 40
4.6 Gen Y is flexible, gen X prioritises performance 41
4.7 Female consumers’ expectations 42
5 Important factors swaying vehicle preferences 43
5.1 Convergence of online research and offline transaction 49
5.2 The dominant influencers: family and friends 51
5.3 Used cars preferred by Indian buyers 52
5.4 Value added services: an age-old need 53
5.5 Used car financing is becoming increasingly popular 55

PART C: ANALYSIS OF THE INDIAN SELLERS’ MARKET

6 Picture perfect selling experience 57
6.1 Selling from home is getting increasingly common 58
6.2 Emerging expectations from 2022 and beyond 60
6.3 Tech enabled platforms driving growth 61

PART D: INSIGHTS FROM INDUSTRY LEADERS

7 InkSight: expert insights 62
7.1 The platform revolution in pre-owned car sales 62
by sangeet paul chaudhary
7.2 Wide data and AI – solving the pricing and 63
vehicle condition conundrum by anand mahurkar
7.3 Selling cars online – is phygital the way out? by rob huting 65
7.4 Emerging used car business models by jignanshu gor 66
8 Conclusion 68
9 Tips for buying & selling a used car: keep it simple, act smarter 69
10 Research methodology 73
11 Who we are 74

5
6
EXECUTIVE SUMMARY
There is a growing trend among new-age buyers for used cars in a fast-changing digital
world. Prospective purchasers rely on information and reviews received from the web
world. Reliable research studies prove that more and more buyers from middle-class
as well as upper middle-class socio-economic ladder tend to opt for buying a used car
rather than purchasing a brand-new vehicle. Purchasing a used car is the culmination
of a two-month long process that includes extensive study, shortlisting, and evaluation
of options, test-drives and evaluation of financing options. Previously, the power
balance battle between buyers and dealers would benefit the latter. The evolution and
development of digital mediums has radically altered the power dynamic.

In FY2021-2022, the Indian used car industry was valued at $23 Bn, and it is expected to
grow and expand at a CAGR of 19.5% in value and 12.7% in volume by FY2026-2027. We
are likely to see a significant shift in the Indian used car market over the next decade,
with buyers evolving and becoming more informed.

Buyers now have a decisive advantage and are becoming more well-informed about
cars, their quality, residual value, pricing applied, costs of finance, availability, and,
increasingly, the precise profit margin that the dealer makes while finalising a purchase.

Cars in India change hands five times during their entire lifecycle before being scrapped.
For the first time, dealers have started recognizing the benefits of e-commerce
since going digital reduces expenses and increases profitability. These forward-
looking dealers have applied customer insight to their advantage by concentrating
on what consumers truly desire. We can describe it as a 3 Ts guiding principle: Trust,
Transparency, and (seamless) Transaction.

The used car to new car ratio reached 1.4 in FY2021-2022. While new vehicle supply
constraints contributed to this metric, it is expected that the used car market would
grow to 1.9 times new car volumes by FY2026-2027. That is, indeed, phenomenal.

7
8
PART A
MARKET OVERVIEW: GLOBAL & INDIAN TRENDS
To say India’s used-car sector is booming is an understatement. Without a doubt,
used car platforms and organised chains are capturing a larger share of the
industry than ever before. These key efforts are aimed at gaining the trust of both
sellers and buyers.

By FY2026-2027, India’s used-car market is expected to touch sales of up to 8 Mn

units. Consumer research has highlighted the emerging preference for personal
mobility amongst consumers, especially in the aftermath of the pandemic. This
has gotten further traction through the acceptance of buying used cars digitally.
Purchasing a used car is fast becoming the new normal across the world.

9
1: USED-CAR INDUSTRY SNAPSHOT: A LARGE, ROBUST,
AND UNTAPPED GLOBAL MARKET
Car ownership is one of the most involved decisions that an individual takes in his or her
lifetime. According to projections, the global used-car industry is likely to be worth $1.52
trillion by FY2026-2027, growing at a CAGR of 5.7%. In only five years, from FY2021-2022
to FY2026-2027, the global adoption of long-term online platforms for used car sales will
significantly alter the growth of the used-car industry.

Let us face the fact: The usage of Artificial Intelligence (AI) will definitely prove a game-
changer. The car industry’s adoption of digital know-how and other technical advances,
including AI, will significantly improve the purchaser’s online experience. Another aspect,
which is probably going to influence the used-car market, is candidness and transparency
among the sellers, customers, and certified used-car vehicles. Obviously, buyers have their
reasons to opt for used cars than buying a brand-new vehicle. One of the guiding factors in
this endeavour is the desire of a purchaser to save money. This is quite understandable. Some
customers seem unsure about the impact of the new car on environment and tend to choose
a tried-and-tested method of buying a used car while others prefer familiarity and more of a
personal experience. Whatever the grounds, the used car industry is thriving. It is showing no
signs of abating anytime soon.

10
1.1: BUSINESS EXPANSION A KEY STRATEGY
FOR USED CAR PLAYERS GLOBALLY
Evidently, the sheen of the new car industry has dimmed slightly, but the glow of the
used car industry remains. In the US and the UK, France, and Germany, used car sales
now outnumber new car sales by nearly a factor of two. India is not lagging in terms of
used car supply; since FY2019-2020, the used-to-new car ratio has remained rangebound
between 1.4-1.6. It is expected to rise to 1.9 by FY2026-2027. By all indicators, India’s
used car market is all set to grow, and expand. That is the main takeaway. With the aim
to appreciate this phenomenon a little better, it is important to draw lessons from the
models and research studies available to us.

A GROWING SHARE OF USED CARS GLOBALLY

Source: car&bike Analysis

FACTORS DRIVING THE RISE IN USED CAR OWNERSHIP

Source: car&bike Analysis

11
Multiple platforms, in our sound judgement, are at play globally, with tech-savvy start-up entrants
dominating the scene, with an aim to disrupt the existing offline businesses. These companies
are leveraging a variety of highly developed digital capabilities, such as big data analytics and
advanced digital platforms, to distinguish themselves from traditional used-car sellers. In effect,
they have redesigned the process of buying and selling used cars thus rendering every step of the
entire process seamless, smooth, and transparent. A good piece of news is that buying a used car
has become a stress-free and rewarding experience for a purchaser.

Simultaneously, established used-car dealers and OEMs are taking effective steps to
safeguard and enhance this vital revenue source by enabling a “Phygital Experience.”
Phygital Experience is one of the latest marketing trends that alludes to a sort of
amalgamation between the physical and digital worlds. It is a fusion in which human
experience is adding value to e-commerce.

The phygital experience is a one-of-a-kind and rewarding experience that begins with a
content-driven journey on a digital platform, allowing for product discovery, in-depth car
details, schedule test-drives, and the option to acquire financing for the vehicle.

This is accompanied by an offline touch, such as the assistance of value-added services

and hassle-free paperwork, which allows the buyer to complete the deal. To put it simply,
both of these journeys (offline and digital) are at the heart of a Phygital Experience.

1.2: GLOBAL USED CAR BUSINESS MODELS

Globally, the buyers have become smarter, and the role being played by the internet explosion
and artificial intelligence has altered automotive industry, and with it the used car business
models as well. In the case of India, the market is exploding into action and benefiting from
the watershed moment that it witnessed in 2020. Historically, it has been observed that the
Indian online automotive market has been slow to mature. Not anymore, though.

The year 2020 has been a game changer.

Globally, as many as 50 top auto sites are leading the way as far as total monthly visits to the
websites are concerned. Four such websites in India, with car&bike dominating the pack, had
94.7 Mn monthly visits, demonstrating the country’s digital transition.

Furthermore, in relation to used vehicle business models, the COVID19 pandemic has acted as
a catalyst. On the one hand, the pandemic has caused disruption of sorts. And, on the other
hand, it has also instigated new thinking as more and more consumers are fancying private
conveyance to ensure personal wellbeing. Given the fact that the offline sales have accounted
for the major volume share of 75% in FY2021-2022, the buyer’s fondness for the conventional
mode of buying cannot be undervalued.

At the same time, it is no secret that online sales are expected to witness phenomenal growth
in the next few years. This distinctive combination has enhanced competition in the market.

12
The trends from Germany, the heart and economic engine of Europe, suggest that the used
car industry will not only thrive but also inspire others as well. In Europe, the used car market
is emerging as the single biggest retail market. Currently, the global trend shows that at least
two-thirds of consumers are content to buy or sell a vehicle entirely online but not all do
so. That is perhaps why the entry of more players and operators will provide a boost to the
market. The European consumer used-market industry is growing by leaps and bounds.
In Pakistan, the market remains to be won but it is showing signs of improvement. Though
transaction volumes in the country remain small and challenges are somewhat like that of
Turkey, the growth story is not a far-fetched dream.

Based on broad commonalities and revenue streams, we at car&bike believe that the global
business models may be classified into five separate groups:

1. Business to Business (B2B): Procuring vehicles from a car dealer / financial institution
/ fleet operator and selling it to another car dealer. Example, procuring a used vehicle
from a New Car Dealer (who may have purchased it through a trade-in) and then selling
the vehicle to a used car dealer.

2. Business to Consumer (B2C): Procuring vehicles from a car dealer / financial institution
/ fleet operator and selling the vehicle to a retail customer. Example, procuring a used
vehicle from a New Car Dealer (who may have purchased it through a trade-in) and
then selling the vehicle (with or without refurbishment) to an end consumer. Indeed,
in today’s automotive world, the used car sales comfortably surpass that of brand-new
vehicles globally. In this regard, the first one is the rudimental C2C/B2C marketplace.
In simple words, it can be defined as a conduit; a platform which brings together sellers
and buyers and grants them an opportunity to have a direct communication link to
complete their transaction.

3. Business to Business to Consumer (B2B2C): Procuring from a car dealer / financial

institution / fleet operator and selling the vehicle to a retail customer through another
car dealer. Example, procuring a used vehicle from a New Car Dealer and then selling
the vehicle to an end consumer (without refurbishment) at another used car dealer’s
outlet through a tie-up with the used car dealer.

4. Consumer to Business (C2B): Procuring vehicles from a retail used car seller and then
selling it to a used car dealer.

5. Consumer to Consumer (C2C): Procuring vehicles from a retail used car seller and then
selling it to another retail customer (with or without refurbishment).

The inability of buyers to purchase brand new cars owing to high prices has become one of
the factors fuelling the increase in used car sales volume. Besides, in India, the emergence of
online cab service also pushed some to either suspend or postpone their plans to purchase
personal vehicles. On the one hand, the pandemic caused economic hardships, and on the

13
other it made individuals realise the significance of travelling privately in their own vehicle.
Thus, the option of purchasing a used vehicle came to the rescue.

Additionally, the role of online sales cannot be underestimated by any stretch of imagination.
Industry participants are concentrating on organic growth strategies, such as business
expansion in untapped regions. The objective is to gain a competitive edge in the used car
industry. Companies are also channelizing their efforts in expanding their market presence
and outreach by rendering the buying experience of used cars easy with competitive pricing,
bundled with warranty and seamless after sales service, including buyback.

However, this is still work in progress. All competitors have an equal opportunity to benefit
from the transaction model. While this is unlikely to be a ‘winner-takes-all’ market, it is almost
certainly a ‘winner-takes-most’ market, with the virtuous cycle of scale driving word of mouth,
a greater dealership footprint, and economies of scale.

GLOBAL USED CAR START-UPS DOMINATING ACROSS GEOGRAPHIES

AMERICAS

EUROPE

MEA

In FY2020-2021, we witnessed a major shift towards inorganic consolidation by TDR Capital,

a private equity firm, which has become the largest digital retailer of vehicles in Europe by
combining Constellation Automotive Group and CarNext. It was the first major consolidation
among European online auto marketplaces, but you can guarantee it won’t be the last across
markets. Over the next few years, the industry will most certainly see consolidation, and
an increase in ‘organised retail’ across used-automobile space spanning across cars, farm
equipment, two-wheelers, light and heavy commercial vehicles, and three-wheeler categories.

14
2: TOP TRENDS INFLUENCING THE USED CAR MARKETS
2.1: CEMENTING RELATIONSHIPS WITH HONESTY
The old adage ‘honesty is the best policy’ comes handy to understand this aspect. In the
absence of a transparent transaction, the buyer attempts to learn about the seller’s integrity.
A seller with a decent reputation — being honest and open — stands to lose a lot if the
straight path is not followed. Here, the buyer is on the driver’s seat and will possibly select
someone (s)he is acquainted with for a transaction. In simple words, a potential buyer would
want someone from the close family, extended friend circle, acquaintance, and professional
networks for purchasing a used car. Generally, knowing someone up close is a blessing. Your
bond and relationship with people can be a key factor in placing trust in them.

Nurturing Relationships
Human choices are often erratic and unpredictable when it comes to high-ticket purchases.
It is no different when it comes to purchasing a used car. Buyers are a part of the community
and social constructs. Therefore, their economic transactions are also usually in sync with the
norms, traditions, and customs of their respective socio-economic backgrounds.

When confronted with informational asymmetry, the buyer can compensate by acquiring
information about the seller’s honesty, or by ‘doing business’ with persons the purchaser is
already familiar with and/or shares a similar socio-cultural background, religious beliefs, and
ethnicity. Undoubtedly, buyers will test both methods. However, it is apparent that tactics
based on transaction are the simplest (particularly dealerships) to adopt if their starting point
is long-term benefit. Organized platforms will need to strike a balance between the online
and offline worlds while providing best-in-class customer service.

2.2: THE RISE IN THE CONSUMER DEMAND FOR ONLINE PURCHASES

The truth is that buying a used car is becoming increasingly digital. Of ten car purchasers,
nine potential buyers prefer receiving and analysing information from the internet. At the
time of purchasing a used car, many prospective buyers expect digital services. This is not
a random or haphazard trend. In fact, it is becoming a customer habit. Two in every three
respondents prefer scheduling an appointment through the platforms’ website. In general, six
out of ten respondents want a speedy response to their digital enquiries within a maximum
of two hours. 10% of respondents prefer interaction with an auto-expert in near-real time,
with a response time of less than 20 minutes. Digital services such as a wide range of sorting
functions, for instance by vehicle age, price, quality of engine, or colour for ease of choice, are
high on list of priorities as far as the buyers are concerned.

As online used car platforms’ gain traction, particularly in the aftermath of COVID19
pandemic, we believe key performance metrics for the digital retail platforms will be quite in
tune with those in the traditional used car sector. That said, the capacity to create trust across
digital touch points for delivering a decent customer experience and the offline physical
experience remain critical factors.

15
Several business models already exist for platforms that acquire cars and then sell them
either in retail to individual consumers or in bulk. However, classifieds and e-commerce in
general, as well as digital car sales have enormous potential. The latter would generate far
bigger revenues than classified postings, thus global used car platforms are shifting into
transactions and e-commerce vehicle sales.

2.3: CONSUMERS ARE EMBRACING DIGITAL TRANSACTIONS

AND VALUE-ADDED SERVICES
One of the biggest challenges involved in any transaction is trust. How to develop trust and
ensure transparency and candidness throughout the process of buying? How to guarantee
contentment and offer best possible rewarding experience for a buyer? In short, making a
potential buyer’s entire journey smooth, swift, and secure involves two basic methods. First
and foremost, it is to determine what exactly a buyer wants, and the quality of the desired
product. Once this is achieved, the rest of the journey becomes comfortable. The second
method is, knowing, valuing, and respecting the desire of a purchaser is of immense value in
delivering the rich customer experience.

Securing transactions
Another crucial aspect is securing the transaction. In other words, it means that a potential
buyer purchases a used car only when the used car platform relinquishes grip over knowledge,
and gives consent to decrease information asymmetry, by providing true quality assurance to
the purchaser. This specific activity is driven by long-term rewards.

The used car platforms, as our research shows, is in charge and holds the key to many
a solution.

Many incentives, such as extended warranties, roadside assistance service, or a ‘returns’

policy, have been designed by the used car industry to ensure a successful transaction.
The idea is to have a secure and smooth transaction and hassle-free ownership experience.
Our research demonstrates that it is becoming a common practice for organized used car
platforms to incorporate a warranty with a used vehicle. Indeed, 12–24-month warranties
are frequently effective, which helps to develop confidence and provide peace of mind.
Organized platforms may provide special pricing or a reduced borrowing rate for slower-
moving cars. In the event of an ‘unsatisfied purchase’, buyers have the opportunity to change
their minds and return the car within a short period of time, as little as a week.

The Organized platforms provide extensive testing and rigorous evaluation which is at par
with OEM level certification. In effect, this means that the organised used car platforms offer
vehicles that have undergone wide-ranging testing, often ranging from 140-200 inspection
points. Following the evaluation, any repairs that are deemed necessary are performed. The
organized used car platform acts as a guarantor in this case.

To provide security for transaction, Organized platforms are offering data on former car
owners and detailed service history to the new buyers. Of course, the personal data of the

16
previous car owners is fully protected to ensure that individual privacy is not breached. All
necessary data related to the car performance, mileage, condition of the engine and service
history is made available. Guaranteed Buybacks after two-to-three years, are bound to attract
repeat buyers to organized platforms and provide price assurance to prospective buyers.

The above measures reassure the forthcoming buyers by reintroducing pricing as quality
indicators. This, in turn, raises both pricing and sales in the long run. Of course, this means
that the dealer’s transaction cost is higher, resulting in a reduced profit margin. As a result, it
is in the seller’s long-term interest to guarantee the initial quality of the car (s)he promotes.

2.4: DATA: A RECIPE FOR DECISION MAKING

Any buyer is fascinated by the idea of a test drive. Yes, it is true that people in today’s fast
paced life rely heavily on modern gadgets such as expensive smart mobile phone devices
and iPads, but the joy of a test drive on the road continues to remain incredible. Buyers do
take out time from their busy schedules to carry out material assessment on the road. It is
characteristically the best way to get a feel of the vehicle before purchasing it. However,
when the car dealers want to purchase hundreds of used vehicles for their lots, it will not
suffice. An estimated 4.4 Mn used cars were sold in India in FY2021-2022, which was similar to
the previous year’s number.

Around the same time, 80 Mn+ used cars were sold across USA, China, UK, Germany, and
France. While the average buyers may be comfortable driving off the lot in their newly
acquired used car, they are often unaware of a broad and sophisticated industry in which used
car dealers replenish their lots with inventory from several locations across the country.

A majority of organized used car platforms work on a bit of art and science, knowing the
intricacies of their industry, knowing consumer behaviour, and also knowing what’s best for
their lot. Data is available in abundance for the platforms to take informed decisions and
benefit from them. Information acquired as a result of content analysis, with limitless data
available in relation to rapidly changing market estimates and customer demands, is gold
dust. At times, it is difficult to determine what used car platforms should and shouldn’t
pay attention to. The devil, as they say, lies in the detail. Attention to detail and analytical
sweep are two key skill sets that can bring about a win-win situation for the purchaser as
well as the seller.

The starting point for most prospective buyers is a recommendation engine on the front
end that provides a sharp degree of personalization. The more information the system
works with, the more detailed and accurate the suggestions it may be able to provide later.
Recommendation engines analyse hundreds of data points in real-time and provide organized
used car platforms and dealers with a list of cars, each with a unique colour-coded badge
indicating distinctive features. Platforms are attempting to connect the ideal car with the
desired buyer at the right moment. It is more about taking a right decision for the right
person at the right moment. Recommendation engine must focus on the present inventory,
and the ways in which the inventory moves out quickly.

17
The critical part, however, is to establish and improve the data models that generate
the rankings of each car to guarantee that we are matching the best cars to the dealers,
followed by the development of a comprehensive machine learning framework to optimise
the real models. Because no two cars are similar, recommendation engines must take into
consideration a plethora of factors such as unique trim choices, mileage, wear and tear,
depreciation, how quickly a car can be sold, and what profit it is likely to return.

While dealers and organised platforms may spend hours browsing through car auction aisles,
the appropriate recommendation engine combining big data and machine intelligence may
speed up and profit all parties. Profitability is determined by the unit economics of each car,
which is precisely programmed into the ever-learning nimble engine.

18
 3: INDIAN USED CAR MARKET: THE UPSURGE AND
DRIVING TRENDS
Given the ever-changing consumer perception and purchasing behaviours, used vehicle
platforms have a significant influence on the circular economy and it indicates a shift from
shared to personal mobility. As a result, the used automotive industry is expanding rapidly, with
a US $50 Bn market in India that has the potential to rise to US $120 Bn by FY2026-2027 (CAGR
of 19%). Cars account for about half of the market’s GMV, with the rest coming from other
vehicle categories (Commercial Vehicles, Tractors, and two-wheelers), all of which are witnessing
substantial growth. This upward trajectory is supported by a 13% CAGR growth in volumes to
reach 78 Mn of which 8 Mn used cars are expected to be exchanged in FY2026-2027.

THE COMPETITIVENESS IN THE USED AUTO MARKET

Industry Volume (Mn) Industry GMV (US$ Bn)
US$ 120 Bn
78Mn
R GR 37
AG CA
C 9%
3% +1
42Mn +1 28
67 US$ 50 Bn Ancillary TAM
available for
19
37 the future
56
8
1 4 23
4.4 8
FY22 FY27 FY22 FY27
Cars CV, Taxis 2W, Tractors Cars CV, Taxis 2W, Tractors
Source: car&bike Analysis

India’s car sector is one of the world’s fastest growing automobile industries. It is already the
fourth biggest in the world. As per SIAM (Society of Indian Automobile Manufacturers), annual
new passenger vehicle sales in FY2021-2022 totalled 3.1 Mn cars, a 15% increase over FY2020-
2021. This new car growth explosion is supported by a parallel used car industry, which gives
buyers the option of owning cars at a lower cost.

USED CAR VERSUS NEW CAR INDUSTRY UNITS (IN MN/YEAR)

Source: SIAM, car&bike Analysis

19
A decade ago, the situation was entirely different. In the absence of organised used car
players, a decade back, more than 55% of all used car purchases were C2C (Customer to
Customer) among friends and relatives, within the ‘Circle of Trust.’ The remaining sales were
handled by unorganised local dealers. Hence, the Indian digital used vehicle industry has
historically been slow to flourish pre-Covid19 period, with online marketplaces unable to earn
substantial profits in a country where consumers are price conscious and where most part of
the transaction phase happens offline. The Indian used car market was valued at $23 Bn in
FY2021-2022, but it is projected to grow and expand at double the rate, at a CAGR of 19.5%
till FY2026-2027.

CAGR BY VOLUME OF USED & NEW CAR MARKET

Source: SIAM, car&bike Analysis

However, due to supply and demand constraints, the Indian used to new car ratio has
remained somewhat buoyant in FY2021-2022 compared to FY2020-2021. Furthermore,
buyers were holding on to their old cars due to delays in the procurement of new cars due to
chip shortages. This has improved towards the start of FY2022-2023 and used car sales are
expected to outweigh new car sales.

20
THE INDIAN USED VERSUS NEW CAR RATIO

Source: SIAM, car&bike Analysis

The growth will be determined by increased sales of used cars in metro and non-metro
cities and a steep rise in online platforms. A buyer has too many options and so does the
seller. Customers do benefit from various online platforms. Amid the ongoing shortages for
manufacturing new vehicles, a problem complicated further due to the COVID19 pandemic,
more and more potential buyers have been opting for used cars for personal mobility. This
scenario is unlikely to change drastically in the near future.

A slew of used car enabled platforms has attracted the interest of Indian vehicle car buyers
looking to buy used cars. Impressive brand campaigns from various organized used car
industry players across broadcast and print media and also online portals have increased
awareness of Indian used car players. Advertisement spends have increased by a whopping
286% from FY2020-2021 to FY2021-2022, which, in turn, is leading to higher investor focus
towards this category.

MEDIA SPENDS ARE GROWING

355 Cr.
1
13
28

126
182 Cr.
6%
28

2
20
52
37
% 97 Cr.
1
8 187
27
124
62

FY20 FY21 FY22

TV Digital Radio Print OOH

Source: Lodestar, FCB Ulka

21
The rationale behind investor interest is simple: The market is yet to be won. There is no dominating
player, and there is lot of space left open for growth with unique models in a market destined to
be among the top five internationally for both new and used cars. According to our research, the
pandemic, digitalization, rapidly changing demographics and ambitions, first-time buyers, and the
availability of different financing choices are among the significant growth factors in this respect.

Our research proves beyond doubt that more than 60% used car consumers are first time car
buyers. It has been observed that a good chunk of buyers prefer to experience car ownership
through a used car first, and then graduating to a new vehicle at a later stage. Affordability
remains a key factor hugely influencing purchase choices. Budgetary constraints, as well
as the realisation that a used vehicle may provide significantly greater value for money,
dissuades some people from purchasing a new car.

3.1: PARADIGM SHIFT IN 2020

A tectonic shift was witnessed in 2020. The COVID19 pandemic significantly pushed capital
to the India’s used markets and propelled the sector forward with an online play. The fund-
raising front is abuzz with activity, but the Indian used car industry is still at an infancy stage
with a disjointed value chain. A rapid development in this regard is not very far, though.

This disjointed value chain persists due to the unorganized nature of the industry. Part of this
value chain is increasingly become organised on both the supply and demand fronts, but there is
more that needs to be done. Alongside, the steady progress on making the category organized,
almost India’s entire major used car players have witnessed a significant rise in investment
over the last year, with one IPO and others scheduled for during the FY2023-2025 time period.
Total equity funding raised thus far across the ecosystem is $2Bn+ since FY2018. Primarily, the
funds will be used for product expansion and a stronger offline presence, and in improving
transactional mechanism in either business to consumer or consumer to business transactions.

22
3.2: INDIAN USED CAR BUSINESS MODELS IN PLAY
Globally, several business models are being tested and evaluated, and in India, these are
based on asset intensity, channel philosophy, and transaction mode.

Asset intensity is defined as the amount of investment made for operational purposes and
the number of sales generated as a result: a firm can be Asset Heavy, Partly Asset Heavy or
Asset Light. Platforms in India’s used car market aggregate demand & supply and focus on
decreasing the number of middlemen while serving buyers and sellers.

They enable consumers and sellers to transact effortlessly through their online & offline
platforms and the diversified business models can be further understood as follows:

Transactional Models
1. Consumer to Business (C2B) is an asset heavy model. The used cars are auctioned off
on digital platforms and majority of the revenue is generated by the selling of used
cars, which the company purchases from individuals and dealers and resells to other
dealerships. Cars are inspected and auctioned to a network of dealers, usually with 24
to 48 hours.

2. Business to Consumer (B2C) model involves selling used cars directly to the buyer.
On the one hand, this is an asset-heavy strategy in which the company buys cars from
customers, refurbishes them, and then sells them to consumers. Used cars are sold
in an omni-channel fashion, either through an e-commerce platform or through
Company Owned-Company Operated (COCO) storefronts, the latter of which
requires a significant investment. The platforms control the whole buying and selling
experience including support for Financing, Insurance & Warranty.

If, on the other hand, used cars are sold to buyers through Franchisees, the model
is asset light. This benefits the company since lower capital investment is locked
in, allowing them to focus more on delivering support to dealerships through
Procurement and Lead reinforcement, Financing & Insurance support, Comprehensive
Inspections, Refurbishment Support, Warranty administration, and After-sales support.

For instance, platforms like Mahindra First Choice (car&bike) are leveraging the
‘Phygital platform strategy,’ in which they aggregate supply and demand while
facilitating transactions via their e-commerce channel (www.carandbike.com), and
offline via franchisee networks.

OEM platforms, such as Das WeltAuto, is primarily focused on establishing a network

through its current OEM dealerships while also supporting buyers with Financing,
Warranty, and Insurance.

3. Business to Business (B2B) is a partially asset-heavy model that deals in a

selected inventory play to support dealers in securing procurement with

23
 the goal of enabling customers to obtain a broad choice of used cars through
dealerships. This strategy is mostly beneficial if a dealer-to-dealer transfer
mechanism is in place to help the stock move around more quickly. Used car
auctioning is facilitated by the company’s tech-led platform.

Non-Transactional Models
1. Classifieds are built around an asset light model, and it is an advertising model where
buyers and sellers meet and transact. Buyers can research and connect with dealers,
OEMs and other partners. Sellers can post free adverts for their products on the site,
and buyers can see ads and buy the used cars they want directly from the seller. In
turn, the classifieds site would provide third-party financing and automotive ancillary
products & services.

2. Content based model includes blogs, forums, online communities, and other sites where
the primary offering to visitors is consumable material, which is often provided for free,
and money is produced by monetising visits through advertising or affiliate sales.

Platforms like car&bike, which originally only existed for consuming auto-content,
are gradually establishing themselves as torchbearers of the Content-to-Commerce
strategy, delivering up-to-date auto content to readers and providing a platform for
buyers and sellers to purchase new and used cars as well as sell cars.

Buyers can access comprehensive inspection reports, schedule test drives, and avail
benefits from a range of value-added services provided by Mahindra First Choice, such
as finance, insurance, and warranty, as well as a 7-day easy returns policy. As a result,
they secure the purchase with the backing of a dependable player, providing not only
peace of mind but also a good buy for their car.

With used cars being India’s fastest growing retail industry, there is plenty of room for
numerous large players to emerge and replace a currently highly fragmented market. In a
market where two-thirds of customers would purchase or sell a car wholly online but only a
tiny percentage can now do so, the more companies that contribute to the development of
this fast-growing sector in India, the better.

24
3.3: EVOLVING BUSINESS TRENDS IN INDIA
While there are several business themes at work globally, at least three are linked with
majority of the organised used vehicle platforms in India:

The transaction trend entails platforms selling directly to consumers. This representation
spans across cars transacted through organized platforms (OEM dealers, independent
dealerships, corporate owned franchisees) and cars sold by unorganized dealers/brokers.

Phygital auto-tech platforms are increasingly combining online and offline buying
experiences, powered by personalization and content-led information services, thus allowing
buyers and auto enthusiasts to buy used cars, new cars, new bikes, consume up-to-date auto
news - covering new launches, provide access to digital auto magazines, and assist sellers to
sell cars on their digital platform.

On the physical front, they are focusing on providing buyers with multi-brand used cars
across offline dealerships as well as best-in-class offline customer experience and value-
added services. Given the need for personal touch and feel of the car remaining high among
first-time buyers, the phygital approach is preferred and could remain important even as the
purchase experience would largely remain dealer driven.

Potential buyers can reserve, test drive, finance, and purchase a certified used car through
used car digital platforms. The cars are supplied to them with a two-year warranty, which is
apart from guaranteed repurchase, and a seven-day easy returns’ policy along with lowest IRR
financing. These platforms also allow buyers to opt in for accessories, thereby enhancing the
monetization of value-added services.

Secondly, helping the organized and unorganized markets secure supplies to match the
equally high demand with quality cars is made possible through multiple supply channels:

1. Tapping into the aggregation of yards where vehicles are parked pan-India and
purchasing certified quality vehicles directly from FIs and leasing cos.
2. Leveraging the pan India network of trained vehicle evaluators, who assist banks,
NBFCs with AI-based algorithms to arrive at the Quality Score
3. Supply is further secured through repossessions and auctioning of vehicles by banks &
insurance companies.

Thirdly, on the demand side, organized used car platforms provide services such as
transaction listings for dealerships, which, in turn, help rotate dealer stocks’ faster and brings
about growth. Buyers are increasingly looking to purchase vehicles with financing at a low
cost, which when coupled with warranties shoots up a premium. However, this premium is
justified with the after sales support, and the hassle of vetting quality vehicles.

25
3.4: THE EVOLUTION OF DEMAND AND SUPPLY FROM
PRIMITIVE TO EVOLVING
Well-known OEMs and start-ups have shown interest in setting up a used car project in India.
There are various other pressing factors behind pushing buyers to opt for used cars over
brand-new ones. Besides the cost of ownership for a used car, which is appreciably less in
comparison to a brand-new vehicle, higher taxes, registration fee at RTO, hugely expensive
insurance policies and present inflation are some of the deciding reasons why a consumer
finds the option of buying a used car more viable.

Why and how India’s used car platforms are making incremental progress can be further
understood as follows:
● Used car platforms are showing progress in organising the market and supplying
quality cars to car buyers. These platforms are evolving as a one-stop shop for quality
content, as well as a platform for buying and selling cars and putting the consumer first in
terms of a differentiated phygital experience. With the result, this industry is moving from
unorganized to being organized and thoroughly professional.
● Demand 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 RISING SHARE OF ORGANIZED PLAYERS IN THE USED CAR MARKET

Source: car&bike Analysis

26
 ● Platforms oversee quality of supply and have 140-200 points check in place to
provide certified vehicles via inspections through third parties or company owned
inspection services. Moreover, platforms also handle consumer leads effectively
across the funnel, owing to comprehensive consumer mapping and customer
relationship management. This leads to a stronger lead conversion at dealerships
and provides a steady source of income to dealers while maintaining control over the
customer experience.
● In India, the demand tilts towards the Non-Metros while at least 65% of the used car
supply in FY2021-2022 was concentrated in metropolitan centres such as Mumbai, Delhi
NCR, Bangalore, Chennai, and Hyderabad. As was expected, markets are small outside of
the top 40 cities, with only the top 20 out of 900 cities accounting for 25% of the market.
However, the demand in smaller towns is expected to swell at a 30% CAGR by FY2026-
2027, compared to a 10% CAGR in the top 40 cities. The supply-demand imbalance
between Metros and Non-Metro markets is reflected in these market characteristics:

THE DEMAND VERSUS SUPPLY OF USED CARS IN SMALL TOWNS

FY22 FY22

35-40%

60-65% In
te
rc
ityC
ar
tr
an
sit

60-65%

35-40%

Supply Demand
Non-Metro Metro

Source: car&bike Analysis

27
DEMAND GROWING STRONGLY SINCE HALF A DECADE

Source: car&bike Analysis

We strongly believe that small towns are expected to witness a substantial growth as the
share of the non-metro cities used vehicles sales is anticipated to escalate to 75%
(in the next four-five years) from the current 65%.
This will be no less than a paradigm shifts in the used car industry.

3.5: VEHICLE SOURCING AND USED CAR CHANNELS

There are multiple sourcing avenues for used car platforms, and the supply chain is dominated
by a network of brokers, which is closely followed by walk-in consumers. Organized used
car platforms, a close second, are rapidly being recognised as important contributors to the
ecosystem. When it comes to supply channels, unorganized auctions and direct client leads on
the websites contribute the least.
SUPPLY SOURCES FOR INDIAN USED CAR MARKET
(MULTIPLE RESPONSES)

Source: car&bike Analysis

28
3.6: EASY ACCESS TO FINANCING IS A KEY LEVER
Gone are the days when a car in use for about a decade or 15 years was considered a used
car. In today’s world, used cars are no more than three –to-four years old. As a result, they are
all well-maintained, and buyers see this as an incredibly fair deal. Therefore, the demand will
hold and continue to expand at a galloping pace.

Buyers will continue looking for used vehicles for at least two reasons. One, there is a delay in
the supply of new cars. So, if someone wants a car, (s)he may go for a used car, which can be
obtained at a 30-40% discount. Due to deficiency of manufacturing new vehicles, exchange
programmes are moving slowly and hence supply has been hampered big time. Without a
shadow of doubt, the future of used car industry appears positive as more and more potential
buyers, especially the youngsters, find it sensible and practical to buy a used vehicle for
personal mobility, safety, value for money and due to availability of multiple choices.

The second reason is that new car prices are quite high in some categories. Furthermore,
compared to pre-COVID19 levels, the demand for used cars witnessed an upsurge of 20-30%
once India entered into unlocking phase. A substantial improvement in demand was seen in
the southern parts, followed by the western parts, while demand growth was comparatively
lower in the eastern parts. Meanwhile, if use of the vehicle is relatively limited, buyers will
definitely opt for used vehicles. The supply is quite low, since financers did not repossess
many cars in FY2021-2022. Consequently, the supply ecosystem’s quantity of cars sold is
disturbed for all used car players.

There is no doubt that the digital organized used car platforms will assist financiers in
disbursing more low-ticket sized loans and resolving the two issues combined. A surge in
demand for used cars in FY2022-2023 is guaranteed.

FINANCE BY BUYERS IS INCREASINGLY SOUGHT

Source: car&bike Analysis

29
The buyers’ key concerns are the time it takes to process a loan and delivery of a car, the
amount of the loan, the duration, the lower rate of interest, and the pre-closure expenses.
Online financing offers lower loan rates and a calculator that displays ROI, EMI, and other
information. However, offline financing provides better trust and comfort since the loan
executive contacts the customer physically for paperwork, collects documents at their
convenience and the customer gets an immediate resolution to any queries. While online
banking is speedier and provides a higher ROI, traditional offline loans provide more
assurance.

3.7: WARRANTIES ARE NOW A FUNDAMENTAL RIGHT

Car buyers are increasingly looking for platforms who package their vehicles with warranties,
with 48% planning to protect themselves against future engine and transmission problems.

About 65% of buyers believe that extended warranty aids in the development of a good
and long-term connection with used car platforms. And almost 76% car buyers anticipate a
two-year comprehensive warranty on the vehicles they plan to buy, and 90% are expecting
roadside assistance throughout the warranty tenure.

At least 63% used car buyers intend to switch their used cars for another used car with
organized used car platforms within three years to stay up with latest technology and OEM
offerings. Buyers anticipate a 70% increase in resale value for used cars during a buyback
transaction within a period of three years.

3.8: STRUCTURAL ISSUES WITH THE INDIAN USED CAR MARKET

Several trends and their effects listed below are influencing the Indian used car industry:
1. Durable & Quality New Cars: Cars with longer shelf life have resulted in a bigger
share in the used car market as well as a reduction in the possibility for service income
during the first several years of a vehicle’s life. During that period consumers are more
likely to go to dealers for repairs. This is also causing the replacement cycle for cars to
increase to four years. In the United States, the replacement cycle is three years.
2. Unsteady Supply of Cars & Increasing Channels: Brokers continue to remain a dominant
part of the value chain, but uncertainty remains with respect to inventory quality due to
high usage and poor maintenance. Hence, organized used car platforms, which provide
360-degree visuals, with a detailed inspection report, and vehicle history records to
reassure used car buyers, have made it simpler for customers to sell cars of various ages
in the private market. Furthermore, unorganized dealers in India are facing competition
from organized used car platforms, which, in conjunction with innovative business models
such as AI-enabled phygital models, are retailing the most recent certified vehicles.
3. OEM Used Car Business Gathering Pace: Increased availability of high-quality and
latest-model cars is accelerating OEM used car businesses. The demographics of used
car buyers are shifting, with an increasing share of older and higher-income consumers.
Manufacturer-certified used vehicles command a considerable premium in the
market and sell rapidly, consequently allowing dealers and manufacturers to enhance
remarketing sales.

30
4. Improved Consumer Awareness: Consumers are exhibiting more mature, experienced,
and sophisticated purchasing behaviours and awareness. This can be in part attributed
to the availability of wealth of information in digital space. The latest trend suggests
that most consumers have purchased and sold multiple cars and are increasingly
choosy when it comes to purchasing used cars from unorganized dealerships.
5. Lack of Skilled Labour: Industry expansion and demand for used cars have increased
the requirement for new trained labour for inspections, sales, maintenance, and
repairs, resulting in sector upskilling.
6. Changing Regulatory Landscape Shifting Winds for the Used Car Industry: Three
regulatory headwinds are enabling the industry to flourish while also fuelling the
increase of old cars:
a. The BS6 emission standards have increased the pricing of new cars. Therefore,
value-conscious purchasers are increasingly opting for used vehicles. Buyers are
increasingly opting for certified used cars with the most up-to-date technology
and safety features. The process of centralised registration with the ‘BH’ series
can be targeted at making it easier to transfer a vehicle’s registration from one
state to another for used cars, thus allowing cross-state sales, and increasing
registrations due to better inventory management. The digitization of the RTO
transfer process will be a driving element in easing out the purchase and selling
process.
b. The reduction in the GST rate from 28% to 12-18% has made cars cheaper
for organised used car dealers. However, transforming the business from
unorganised to organised by decreasing the GST further offers several benefits.
More volume and lower tax rates translate to higher government income while
controlling the market with decreased tax evasion. Another key area motivating
buyers and sellers to use digital payments.
c. The last, but by no means the least factor is, continued focus on establishing
legal rules for intermediaries in the organised used vehicle area, who are at the
centre of used car transactions and transfer the car numerous times before it is
officially registered in the name of the ultimate owner.
Despite challenges on several fronts, there are enough reasons for us to remain upbeat,
hopeful, and optimistic about the future of used car industry!

31
32
PART B
ANALYSIS OF THE INDIAN BUYERS’ MARKET
The IBB Report gathered and analysed the data for this study. The research study, which
was done in partnership with car&bike and Das WeltAuto, is an in-depth analysis and
interpretation of seller, buyer, and dealer behaviour in the Indian used car industry. This
methodical study gathered relevant information and data from 1000 respondents from
Metro and Non-Metro cities in India.

One of the major findings of this study was that regardless of global trends in the used car
industry, each country has its distinctiveness and some startling parallels, too. India’s used
car market is as robust as Germany’s, as the average age of vehicles on the road continues to
witness a steady decrease.

Thanks to India’s state of economy, consumer confidence appears to be on the ascendancy

in recent years. Global economic recession has had little impact on India’s growth story,
thus paving the way for boom in country’s used car industry as well. The study also
demonstrated that personal contentment and societal image remain two guiding factors
that motivate an Indian purchaser to own a car with a sense of pride. Given the demands of
dynamic lifestyle and increased expectations, car buyers in India are showing enthusiasm to
purchase a used car.

33
 4: FEATURES OF THE INDIAN USED CAR BUYERS’ MARKET
4.1: REWARDING EXPERIENCE OF OWNING A USED CAR
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. The following chart
explains the bigger picture.

AGE OF USED CARS DECREASING SINCE ‘11

Source: car&bike Analysis

Some of the reasons why a purchaser in India is motivated to buy a used car than a brand-new
vehicle are excruciatingly high prices of a new car, slower depreciation on used cars, reduced
insurance costs, and category upgrading for a fraction of the cost. This clearly suggests that
consumers’ need for trust formation-- whether through interacting with organized platforms
for late-model cars or social networks for older used vehicles-- remains critical. Vehicle age
is expected to decline further to 3-3.5 years by FY2026-2027 due to volume growth in the
leasing and subscription categories (estimated CAGR of 20% versus new car CAGR of 7%
versus used car CAGR of 13%) and on account of better cars, safety measures, and much
improved road infrastructure. No wonder then, it is expected that revenue of India’s used
automotive industry would witness a five-folds increase and possibly reach the $120 Bn GMV
mark in the next four-five years. This, of course, is massive.

However, as compared to unorganized dealers, organized used car platforms are more eager
to deal with newer cars. This is especially true in both metros and non-metros, where 65% of
used cars sold are less than four years versus 75% the previous year. Given an option, 78%
of consumers choose organised players for they have placed trust and are, in turn, provided
certified quality cars.

34
 CUSTOMER SPEAKS

“
Another advantage of

“
For me, buying a used
car means getting all
buying a used car is
that my better half or
my buddies too can use
it for learning and fun
the essential benefits at drives. So, why not!!
a very affordable price.

” ”
“
Given my budget at the

“
I want to drive a used car
for two years and then
buy another used vehicle
moment, I want value
for money. Why not
buy a used car which
has more to offer.

”
for two more years and
perhaps then upgrading
to a brand-new car.

” “Me and my dad both

have a bike. For family

“
functions, we travel
separately, but once my
Used car is the answer car comes home all four
to many of my problems. of us can go together.
Right from commuting to
work to going out.
”
”
35
4.2: CHANNEL PREFERENCE OF INDIAN BUYERS
Buying a car means much more than just personal mobility. Our research confirms that personal
fulfilment and societal image enhancement are the additional benefits of owning a car. Apart
from safety and comfort, and personal mobility, buyers feel that their purchase also elevates
their social status. Owning a car means confidence for some. With rising expectations and urge
to make a statement in society and also at the workplace, Indian car buyers are exhibiting a
readiness to buy used cars. According to the survey, 15% of used car purchasers are women who
are comfortable shopping in a phygital mode, a threefold rise from FY2020-2021.

Given a choice, 78% buyers avoid buying from unorganized players due to a lack of trust and
the fear of being sold a lemon vehicle. Buyers expect an integrated customer experience,
from quality content during discovery phase including inspection reports, to reserving and
taking test drives at a convenient location and being given an instant cash offer for selling
vehicles with minimal hassle in a stress-free environment.

Personal interactions in dealerships continue to dominate the information-gathering process for

many consumers. Although convenient, the process of purchasing a vehicle online still alludes
many consumers’ technical abilities and know-how. The final decision, therefore, may lead to an
in-person purchase. That said, obtaining hassle-free information online is gaining traction.

In addition, car buyers trust organised used car players in both Metro and Non-Metro cities
due to increased loan availability, availability of used cars in excellent condition, and strong
after-sales support.

The Northeast and East zone of India continue to lag in the adoption of digital channels that
facilitate transactions, underlining the enormous opportunity to move from conventional
channels to digital avenues.

Buyers are expecting an integrated customer experience, from quality content during
discovery phase, including inspection reports to reserving and taking test drives at a
convenient location and being given an instant cash offer for selling vehicles with least hassle.
This has led to a spurt in multiple channels through which buyers can complete transactions.
This is primarily attributed to purchasers’ strong price focus.

As a consequence, the unorganised market’s poor ‘value for money’ reputation spurred the C2C
industry. Because of a lack of confidence in the C2C segment, as well as the cost of paperwork
and warranty coverage, the market has shifted to purchasing through organised used car
platforms, which bridge the gaps with transparency and trust. The direct (C2C) channel has been
mainly buoyant since FY2010-2011. While the organized platforms have witnessed a surge in
growth, the disorganised channels, on the other hand, have been steadily declining.

36
4.3: THE CONSUMER PURCHASING BEHAVIOUR
Compared to the purchase of a new car, the process of purchasing a used vehicle is often a
faster process. Buying a car is not a compromise, rather it’s a choice. Hence, price, model type
and incentives are significant to Indian buyers when purchasing used cars. A used car purchase
takes two-to-three months on average, compared to three-to-four months for a new car.
While making a purchase, buyers have a plethora of alternatives. Nonetheless, 95% of Indian
buyers begin their research journey online for thorough car information, price, finance, and
insurance. More than 85% of used car buyers use third-party comparison sites, OEM websites,
and multiple social media platforms to research all vehicle specifications before deciding on
which brands to buy. Although convenient, the purchasing of a vehicle online still eludes many
consumers’ technical abilities and know-how. It must be noted that offline dealerships provide
the second level of validation. Hence, personal interactions in dealerships are bound to lead
the information-gathering process for buyers.

Multiple online-offline platforms are likely to co-exist in this market across vertically
integrated business models, reflecting the global trend of mapping supply-demand
challenges with innovative tech-led solutions and reducing buyer pain points.

MITIGATING THE PAIN POINTS OF BUYERS

Source: car&bike Analysis

37
While platforms are striving to be lay emphasis on a buyer, the global setting is favourable to
India as 60% buyers settle on a brand and model before visiting a dealership. This decision of
theirs is based entirely on the information received from online platforms with 50% buyers
using digital platforms to watch online videos of test drives, walk arounds, demos, and
opinion Vlogs. During the research phase, the first-time car buyers are likely to spend five-to-
seven hours online, with budget and manufacturing year of the vehicle taking precedence.
Second-time car buyers are more likely to spend two-to-three hours online during the
research phase. Their focus appears to be on make, model, and manufacturing year etc.

The research study discerned that Indian car buyers use the online mediums to do five
things: conduct research on car costs (60%), identify actual used cars for sale (65%), compare
different models (67%), figure out the worth of their present car (75%), and locate a dealer
or acquire dealer information (60%). Indians prefer entry-level used cars which are seen to be
safer than two-wheelers, as they are less prone to accidents. Therefore, buyers prefer opting
for low ticket deals to meet their mobility needs.

4.4: USED CAR BUYER PROFILING

Confident Consumers & Their Informed Choices
No two consumers are alike. It is only human to be different. A decade ago, many consumers
would depend heavily upon local dealers and brokers or even friends and acquaintances to buy
a used vehicle. At the time, there was obviously less exposure to knowledge and the customer
awareness had not reached its pinnacle. Sadly, many cases of cheating and fraud would be
reported from India’s Metro and Non-Metro cities. There was reliance on mechanics, too.

However, as soon as reliable digital players emerged on the scene, the market began showing
a positive development. Five years later, post-2015, the digital explosion made car buying
experience rewarding and pleasing in more ways than one. Not only did the exposure to
knowledge enhance manifold, but a customer also became more confident and began placing
trust in online platforms and organised platforms while making an informed choice of buying
a used car.

In the last two years, from 2020 to 2022, more digital transactions and transparent offline
experiences resulted in fewer fraudulent cases. This is, indeed, a win-win situation for one
and all.

Needless to say, the pandemic catapulted the approval and need for used vehicles for
personal mobility, safety, status in society and friend circles, and also the style statement.
We at car&bike and Das WeltAuto are convinced and confident that the future of the used car
market remains safe, secure and largely optimistic.

Delightful Diversity
For some customers, buying a used car simply means personal comfort and a reason for family
bonding while, for others, it could mean an enhanced image in the society and value for
money, too. For the latter category, ‘everything is image and image is everything.’ Moreover,

38
for one set of customers buying a used car gives a lift to their mood, and they perceive this
experience as an elevation in their lifestyle. Yet another set of consumers is driven by budget
and affordability while, for some others, buying a used car means a dream come true. There
are also buyers for whom the experience of buying a used car is all about convenience, stress-
free travel, and low maintenance cost.

Interestingly, an increasing number of young adults and millennials are making the prudent
option to purchase used cars at low costs. One remarkable point made by many youngsters
was that they do not feel any psychological pressure to buy a new car. They asserted that
they bought used cars with open arms and won’t hesitate to do that again. When it comes to
distinct choices by customers to buy a used vehicle, we can call it a delightful diversity.

Comfort, Convenience and Contentment

Our research study points out that one of the biggest motivations for buying a used car
is affordability; the human urge to save money and seek value for the same. It was also
observed that many customers are not fond of long waits for delivery when it comes to
buying a new vehicle. Therefore, as our research shows, such a category of consumers prefer
buying a used car instead. The idea of an opportunity to be on the wheels almost immediately
gives such consumers a feeling of instant pleasure and contentment. It also means comfort
and convenience. There is also a type of consumer who wants to first polish their driving skills
while operating a used car and then decide about buying a new one. While buying a used
vehicle, many consumers are of the opinion that they have more choices; not the case when it
comes to buying a brand-new car.

Be that as it may, the mindset of consumers in relation to used cars was in some ways
identical across many Indian cities but there were stark differences as well. In the southern
part of India, for instance consumers in Kochi appeared more open and up-front about owning
a used vehicle. The impression was not the same in cities like Mumbai. In some Indian cities,
societal impressions do influence decisions.

To make it easy to comprehend, our research study pointed out that for a set of buyers, their
profiles, diverse motivations, different requirements, their monthly income, socio-economic
status, and aspirations determine their choices to buy an average or higher end used car.

39
4.5: KEY BUYER PERSONAS
Car buyers working as salespersons, junior executives and accountants —most of them not
married yet—with a monthly income ranging from INR 45,000-75,000, show a tendency to
buy used cars for typical rough and tough use. They generally appreciate the fact that minor
scratches and general wear and tear won’t matter much on a used car. They are not yet
financially equipped and mentally geared up to own a brand-new car and want less stress in
their life. For them, professional career growth remains a priority rather than buying a car
while acquiring loans from the banks. Their relationship with a used car can be best described
as casual. This group of buyers is known as ‘Value – Functional Entrants.’

Another set of young car buyers with a monthly income between INR 75,000 and 100,000 need
a car for utility and conveyance. Research depicts that this category of buyers comprises just
married or still unmarried persons, working in the capacity of assistant managers, managers in
Information Technology firms, banks or corporate sector. They are done with travelling in three-
wheelers or waiting at the metro stations. While choosing a car model this category relies on
digital platforms. They do consider their budget constraints and tend to make an informed choice
while buying a used car. They do take good care of their vehicle, often wash it themselves, and
take reasonable care as far as the vehicle’s maintenance at regular intervals is concerned.

Our research also shows that this category of persons is generally very ambitious and
industrious. This category is referred to as ‘Social Climbers.’

Another set of buyers have higher monthly incomes than the above two categories. They are
either small business owners or mid-career professionals. Generally, members of this category
are married and have one, two or more children. Their monthly income ranges from INR
100,000 to 150,000. The motivation is to provide comfort for the family, especially kids. Some
of them pick and drop their kids to school and/or tuition centres. They treat their vehicle as
one of the family members and tend to take decent care to maintain the vehicle’s working
condition. They do a lot of research before buying a used car and generally have a preference
for cars in most excellent conditions. We dubbed this group of buyers ‘Quality Seekers.’

One more type comprises buyers with a monthly income over INR 150,000. They occupy
senior positions in their professional life. The aim seems to impress and make a statement
of upward mobility in society. They nurture a passion for automobiles. They will not use used
cars for more than three years. After using a certain model for about two-to-three years, they
choose an upgraded version because they are fond of making a style statement. We termed
this cohort of purchasers ‘Loftier Individualists.’

Yet another set of car buyers belong to higher socio-economic ladder with a monthly income
exceeding INR 250,000. They go for regular servicing of the car and wash it as often as
possible. While buying a used car they often opt for higher-end models. Not only do they
need a car for their personal mobility and business meetings or social gatherings, but they
also need the vehicle to show what they own. They are assertive, aspirational, and energetic.
These individuals are more sophisticated and are labelled are ‘Stylish Alphas.’

40
Openness to Acceptance
The flexibility to accept ‘used car’ ownership was higher among buyers who buy the car
for individual & family utility over social recognition. Acceptance openness is inversely
proportional to cost rationalization. Value – Functional Entrants, Social Climbers and Quality
Seekers are early adopters in the category. This is followed by Loftier Individualists and Stylish
Alphas whose motive is less towards acceptance and more towards showing off or to fit in.

Speed to Purchase
Value - Functional Entrants and Social Climbers make decisions faster, from planning to
purchasing a car to being less stringent in evaluating and selecting which car to buy and where
to buy it. Quality Seekers, Loftier Individualists, and Stylish Alphas take significantly longer to
make a decision since they are exceedingly diligent and selective.

4.6: GEN Y IS FLEXIBLE, GEN X PRIORITISES PERFORMANCE

First-time Gen Y [1986-1996] millennial buyers are more likely to seek experiences than
possessions as they are flexible. These prospective customers see used cars as utilitarian
vehicles that also provide comfort. It has been observed that Gen X [1965-1980] purchasers
buy used cars for features such as power and pickup, fun to drive, and overall performance.
They are more likely to consider cost-effectiveness. In short, performance is their priority.
The three negative perceptions and pre-notions held by society around the discernment of
used cars, are being smashed by late millennials

● Elders still have a long-held prejudice towards acquiring second-hand materialistic

possessions. Most parents/elders in the home still have a negative attitude against having
any used cars. They frequently serve as gatekeepers in the purchasing process, but their
effect on our consumers is near minimal.

● Youth are less secretive and welcome used cars with open arms. Most people
are aware of the fraudulent practices that occur in the used car market. However, this
does not discourage consumers from purchasing a used car, especially with prominent
manufacturers entering the used car market. If a used car is chosen after proper screening,
the apparent benefit outweighs the risks involved.

● Many are reluctant to identify themselves as used car owners. Even though millennial
buyers are increasingly open to buying used cars, they still feel judged by society for doing
so. They only feel safe admitting to a small group of close friends who they believe will not
judge them.

The majority of buyers are young males between the ages of 25 and 40. They are mostly
graduates working in junior and mid-level management roles in private sector or are
self-employed.

41
4.7: FEMALE CONSUMERS’ EXPECTATIONS
Statements that women are breaking gender stereotypes and glass ceilings are clichéd. Such
worn out assertions do not make sense anymore, as women are making a statement of their
own in every field, and in every aspect. Car buying can be a vastly different experience for a
woman in comparison to a man. No hyperbole, it is becoming a woman’s car-buying world out
there!

Women purchased roughly 15% of all used cars and influenced over 77% of all used car sales.
Women buyers would rather deal with women salespeople at the dealership.

Perchance it should come as no surprise. But there is a need to hire and place more women on
the dealership sales teams and train male employees in the behaviours and outcomes most
desired by women buyers.

Reality versus Perception

If perception is the buyers’ view of reality, the gender difference is substantial. Women who
participated in our survey said they felt calmer and more confident while interacting with
a female sales adviser. They also said they felt less intimidated and ‘overwhelmed’ when
interacting with a female salesperson.

“It’s reasonable for buyers to be worried and nervous about purchasing a car, for it is a
major purchase in anyone’s life,” this quote based on our finding so beautifully captures the
emotion. The advisor can make a significant impact during the purchase journey.

Relationship Building & Higher Emotional Quotient

We discovered that pricing is significant, but women rank it lower since they feel they can get
the same car for a lesser price elsewhere. Women advisors were ranked higher in all aspects
of building a successful connection, including trustworthiness, respect, congeniality, and
understanding.

Women buyers value a salesperson’s ability to listen and not use her influence or position
during the buying process. A successful sales consultant greatly values a customer. With a high
Emotional Quotient, (s)he appreciates that their role is to assist and lead the buyer truthfully.
Despite this, one of the most basic behaviours turns out to be one of the most bothersome,
too, with more than three out of five respondents expressing displeasure with how they were
welcomed in the first place.

This, obviously, needs a reform.

42
 5: IMPORTANT FACTORS SWAYING VEHICLE PREFERENCES
Due to Covid19 pandemic, the number of price-conscious buyers has risen since last year
while the number of purchasers willing to increase their finances for a higher-quality
vehicle has fallen.

Nearly 60% of used-car buyers go for used cars within a specific price range and are open to
a variety of options. This is followed by 25% of respondents who are certain about the car
model. During their purchasing process, they do not look at any other models. They are so
specific. This is closely followed by 15% of respondents who are willing to adjust their budget
based on the condition of the car they discover. This figure has dropped slightly from 24% in
FY2020-2021 to 15% in the last one year alone, indicating that used car buyers are no longer
looking at the acquisition of a used car with a short-term lens.

HOW BUDGET AFFECTS THE ACTIONS LEADING TO THE PURCHASE

Source: car&bike Analysis

According to the study, a vast majority of first-time car buyers (59 percent) prefer a Hatchback
or Sedan, mirroring the same category demand for new cars. Used SUVs are becoming more
popular as a second vehicle due to their increasing availability as compared to FY2020-2021.

43
THE TYPE OF CARS PURCHASED BY INDIAN CONSUMERS

Source: car&bike Analysis

The cost of entry-level used hatchbacks under six lakhs has increased, but there has been no
obvious effect on the cost of used mid-premium cars costing greater than six lakhs.

In FY2021-2022, a sharp increase has been observed in shift of buyers moving from mass
market to mid-premium cars majorly across Metro cities due to higher purchasing power and
greater availability of vehicles across dealerships.

COMMERCIAL VALUE AND PREFERENCES HAVE CHANGED ACROSS MARKETS

Source: car&bike Analysis

44
Many buyers are purchasing a car for the first time, but this proportion has decreased by 11%
from previous year, showing some level of buyer maturity. According to survey results, car
buyers in Non-Metros (64%) are more likely to acquire a used car as their first car than buyers
in Metros (55%). Non-Metros cities account for 65% of used car demand and have a CAGR of
30% which is three times that of metros.

Organic searches on digital platforms for ‘second hand car’, ‘used car’ and other similar
keywords increased by 60% between FY2020-2021 and FY2021-2022, as personal mobility
came back in focus post COVID19 pandemic. Contactless experience of booking test drives
before purchasing a used car is preferred by 70% of Indian buyers

Three crucial elements have been mainstreamed during used car purchases, in decreasing
order of importance: Certified vehicles, warranty, and comprehensive vehicle history.

WHAT INDIANS CONSIDER WHILE PURCHASING A USED CAR?

(MULTIPLE RESPONSES)

Source: car&bike Analysis

A swift increase of digitization and importance of personal mobility have placed new
demands on used car platforms, allowing 58% of first-time car buyers to purchase a vehicle in
FY2021-2022. As a result of this, 65% of car buyers indicated that buying a used car was their
“option/choice.”

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VARIED FACETS OF THE INDIAN USED CAR BUYERS

58%
First used car purchase
67%

Second used car purchase , but already own a 26%

pre-owned car 26%

13%
No current car; previously owned car was sold

3%
Exchanged current car with a used car
*NA

FY22 FY21

*NA The option was not asked last year.

Source: car&bike Analysis

Indian used car platform technologies and offerings are at various stages of maturity and
market readiness, but they are generating exceptional interest from car buyers in Non-Metro
cities, who are (three times) more likely than car buyers in Metro cities to upgrade to the
latest used vehicles within a period of three years. Since car ownership is on the rise, more
and more Indians are eager to trade in their vehicles for another used vehicle. As a result, it is
critical for these organised platforms to create a compelling trade-in offering plan to attract
repeat purchasers.

More than a third of car buyers considered used cars due to value for money and affordability.
Used vehicles are becoming more popular than ever before among car buyers for its
functional use.

46
FACTORS DEFINING THE PURCHASE OF USED CARS

Source: car&bike Analysis

Due to India’s gigantic geographic size and unequal distribution of supply and dealer
networks, used-car sales by volume are not uniformly spread among the four zones. The zonal
volumes have shifted in recent years. The lion’s share is acquired by the North, West, and
South zones. In terms of used car market numbers in India, the East is trailing behind. The NCR
is generating significant volumes in the North, but it is more evenly distributed among other
states in the West and South. The North zone continues to provide the greatest share of total
volume in the used car industry, at 31% as of FY2021-2022. Conversely, this has decreased
from 36% in FY2015-2016.

47
WHERE DO INDIANS BUY MOST USED CARS?

Source: car&bike Analysis

With considerable amount of savings along with the assurance of certification and warranty,
buyers get almost all the benefits in a used car that one would expect when buying a new
vehicle. But because of the unequal distribution, the demand for old cars has been higher
than predicted with buyers paying up to 20% more on average compared to last year.

48
USED CAR PRICES ARE RISING

Source: car&bike Analysis

5.1: CONVERGENCE OF ONLINE RESEARCH AND OFFLINE TRANSACTION

In India, the phygital coupling is transitioning in a similar fashion as developed markets.
At least 35% of Indian car buyers prefer to transact via phygital platforms, commencing
their journey with online research and leveraging dealership touch points to close their
transactions, compared to 65% of respondents who choose to buy directly from dealers
within 15 kilometres of their residences. India is fast becoming a hub for used car buyers.

In essence, test drives are a key component as far as car buyers are concerned. During their
transition from online to offline shopping, they so desire to touch and feel the certified
used vehicles. In Metro and Non-Metro cities, over 65% of test drives are still performed
at dealerships. Before making a purchase, buyers take 2.4 test drives when considering
organised players, compared to 1.5 test drives when evaluating unorganised players. This
indicates that consumers find comfort in purchasing from organized players.

49
THE PURCHASE JOURNEY
Awareness
Google/ Websites/ Youtube/
START
Teambhp/ Auto portals

Discuss with close network

Compare prices & variants
(friends/ relatives)

Visit neighbourhood dealers/ garages

Research & DiscoveryI nterest

Visit Organized Used car platform Test Drive at home, Test Drive
dealership
Mahindra First Choice Check the car with Check the car with Compare prices
(Car&Bike), Volkswagen mechanic/ friend mechanic/ friend
(Das WeltAuto),OLX, Check documents + Insurance
Check documents + Insurance
CarDekho, CarWale
Cars24, Spinny, Maruti Check Finance/ Arrange Funds Check Finance/ Arrange funds
(True Value)
Like the
deal
Transaction

Complete Documentation Make Payment

Source: car&bike Analysis

There is a varying level of influence across different aspects of the car-buying experience.
During vehicle inspections, buyers were assisted by their close circle (friends, family/relatives).
Moreover, they have increasingly been getting vehicles inspected by an OEM mechanic. This
growing trend of bringing in expert mechanics is expected to rise, signifying that more and
more customers will start interacting with organised channels of the used- car industry during
their purchase process.
PARAMETERS INFLUENCING BUYERS DURING INSPECTION JOURNEY
(MULTIPLE RESPONSES)

Source: car&bike Analysis

50
5.2: THE DOMINANT INFLUENCERS: FAMILY AND FRIENDS
Close family members and friends wield tremendous influence (50 percent or more) on car
selection. Their opinions count and act as a catalyst for searching on the appropriate platform.
Spouses and parents also do play a key role in settling on the budget while pals are critical in
the selection of make and model.
THE FACTORS BUYERS GET INFLUENCED BY WHILE PURCHASING A USED CAR

Source: car&bike Analysis

Surprisingly, 30% of buyers in Metro cities and 12% in Non-Metro cities make their own
purchasing decision when buying a used vehicle. When it comes to purchasing car accessories,
22% are likely to be persuaded by auto content websites. Cashback incentives were also
important for Indian used vehicle customers. Interestingly, a significant majority of buyers
availing a loan/finance in Metro cities happen to be persons in senior/top management
positions employed either in government or in the private sector, and self-employed
professionals (traders/merchants/shop owners/biz owners). At least 30% of buyers from this
category did take a loan/finance to buy a used car.

Going forward, skilled OEM mechanics and test drives at a location of choice will play a major
role. Digital platforms like YouTube and Instagram are significant influencers when it comes
to buying a used car, and they are progressively gaining more traction.

Buyers wield a lot of influence on their expectations regarding how used car platforms should
handle customer experience in a phygital setting. They anticipate a simple used car search on
the internet, with a variety of cars to choose from along with multiple filters and the ability to
test drive at their preferred location while the remainder of the transaction is handled offline.

When it comes to buying used cars online, some customers vociferously voice their concern
in the event of a bad experience. Overall, customers who remain silent are likely to be the
most bothersome for businesses. As a direct consequence of this, used car platforms could
eventually suffer a loss of loyalty.

51
Thus, the used car industry has reached a fork in the road. One path leads to reinvention
of the online research journey while the other maintains an offline presence of
dealerships to be in control of the customer experience. Additionally, organized used car
platforms have boosted their spending in advertising and technology as well as a range of
value-added services.

5.3: USED CARS PREFERRED BY INDIAN BUYERS

Buyers are certain of the vehicle brand, model, and variant before entering a dealership,
and we highlight the preferences of Indians purchasing used cars below depending on the
buyer profile segment. The top ten cars purchased by Indians in FY2021-2022 were Maruti
Swift, Maruti Alto, Maruti Wagon R, Maruti Dzire, Hyundai i10, Hyundai i20, Mahindra Scorpio,
Mahindra Bolero, Honda City, and Renault Kwid.

SEGMENT WISE BRAND AFFINITY

52
5.4: VALUE ADDED SERVICES: AN AGE-OLD NEED
Consumers in Non-Metro cities valued the option of extended warranty coverage or service more
than buyers in Metros. This might account for the increased proportion of consumers who want
to purchase a certified car. To entice used car buyers in droves, organized used car platforms are
deploying the latest technology and innovations such as digital buying experiences, doorstep test
drive and delivery, extended warranties, and easy financing alternatives.

WHAT INDIANS DEMAND WHEN IT COMES TO THE SERVICES?

(MULTIPLE RESPONSES)

Source: car&bike Analysis

53
Research study also reveals that buyers are twice as likely to seek platforms that offer a
complete transaction experience, including warranty, easy financing, and buyback. The
immediate result of increased buyer purchases is a dramatic boost in finance penetration
from 13% in FY2020-2021 to 30% in FY2021-22. While financing is still fragmented, there is no
overall drop in retail sales. There is rather a shift in buyers financing behaviour.

THE TWO PARALLELS WHEN IT COMES TO FUNDING A USED CAR

Source: car&bike Analysis

Major buyer personas taking a loan/finance in Metro cities are senior/top management
(employed-govt & private), and self-employed professionals (traders/merchants/shop owners/
business owners). At least 30% of these buyers took a loan/finance to buy a used vehicle.

Major buyer personas taking a loan/finance in Non-Metro cities are middle management
(employed as government servants or working in private sector), and self-employed
professionals (traders/merchants/shop owners/business owners). Nearly 40% of these buyers
took a loan/finance for their purchase.

In the majority of cases, the low financing penetration is accompanied by a low loan-to-
value ratio: almost 60%. This indicates that financiers/NBFCs are hesitant to fund larger loan
amounts for used car loans, and buyers prefer to take smaller loan amounts due to higher
interest rates. Car buyers received finance for used cars with an average loan size of 3.5 lakhs.

54
5.5: USED CAR FINANCING IS BECOMING INCREASINGLY POPULAR.
In India, differences in used car buyers’ behaviour across geographies have significantly
decreased, as have differences between various age groups. 63% of car buyers, particularly
millennials aged 20-40, invest personal savings and liquidity to purchase a vehicle compared
to 37% who take out a loan. Self-employed buyers are also more comfortable making the
purchase in cash and/or borrowing from family & friends.

In FY2021-2022, 70% of transactions were completed with personal financing while 30%
needed a loan.

PERSONAL FUNDING IS STILL THE KING

Personal savings were used by 72% of car buyers in Metro cities, compared to 67% in Metro
cities. Due to inroads by Banks/NBFCs to tempt car buyers with lower rates of interest,
pandemic aiding in declining cash usage, and confidence in acquiring used cars, 33% of car
buyers in Non-Metro cities took a loan compared to 28% in Metro cities.

55
56
PART C
6: PICTURE PERFECT SELLING EXPERIENCE
Trust is the buzzword. Better resale value is leading to higher offloads by the owners.

The overall number of vehicles sold in the used car business has remained constant, although
there is a greater emphasis on selling to the organised used car players. Owners used to
contact unorganized dealers first, but they have begun to deal with organized players due to
better response times, fairer valuation, and increased trust.

Used car platforms have made great strides in allowing car owners to sell their vehicles. The
following are five compelling reasons why sellers are eager to offload their cars:

Relocation Car problems

The desire to
replace the car after
a few years of use.

Riding on the Higher resale

current SUV trend value of used cars

These cars are resulting in high-quality inventory for used car platforms. Buying cars straight
from home has been a popular source of supply in recent years. This has increased by six times
between FY2020-2021 and FY2021-2022, with most organized players providing this service.

57
6.1: SELLING FROM HOME IS GETTING INCREASINGLY COMMON
With growing internet penetration and digital adoption by sellers, the consumer journey has
altered over time. More and more owners are discovering new organized used car platforms
for selling their cars. Friends, relatives, garage owners, classified websites, and social media
networks are no longer their only possibilities. According to our survey, 90% of owners who
want to sell their vehicles choose digital channels with 70% listing their vehicles on three
platforms on average.

Highest price, assured transfer, and genuine purchasers are the most important aspects for
owners considering selling a car.

ATTRIBUTES CONSIDERED BY INDIANS WHILE SELLING CARS

(MULTIPLE RESPONSES)

Source: car&bike Analysis

According to our research, 84% of car sellers would love to sell a car from their home itself.
However, compared to previous year, only 50% of used cars entering the market were retail
worthy (five years old), with 25% having covered distances of less than 40,000 kilometres.

In Metro cities, 71% of car sellers would like to upgrade to a new car, compared to 52% in Non-
Metros, indicating a larger supply ratio of future used vehicles in Metro cities and a shorter car
holding period. About 68% cars on used car platforms are powered by petrol with the percentage
of vehicles running on diesel growing from 25% in FY2020-2021 to 32% in FY2021-2022.

Interestingly, selling a car takes about 7-8 days on average in Metros and Non-Metros. Used
car platforms will need to focus on streamlining selling procedure to build trust and disburse

58
payments in real time, as car sellers expect the average selling turnaround time to reduce from
eight to four days. This scenario has seen vast improvement in the past couple of years with the
full sales process, including receipt of full payment, reducing from 23 days in FY2010-2011 to 8
days in FY2021-2022. The average number of days projected to sell a hatchback (which accounts
for more than half of all cars sold) was six, but the car was actually sold in nine days.

TURNAROUND TIME EXPECTED WHILE SELLING A CAR

Source: car&bike Analysis

Car sellers, for example, get rid of their cars after covering distance of 70,000 kilometres on
average, with an average vehicle age of about 4 years in FY2021-2022 compared to 4.4 years
in FY2020-2021. There are two reasons why owners consider selling their old car: One, their
urge to upgrade after a few years of use; and two, the vehicle’s maintenance issues. More
than half of the vehicles sold are hatchbacks, 20% are SUVs while 16% are Sedans.

REASONS WHY OWNERS’ SELL THEIR CAR

Source: car&bike Analysis

59
6.2: EMERGING EXPECTATIONS FROM 2022 AND BEYOND
Sellers have developed a liking for offloading cars to organised used car players, with 85%
requesting full payment within 24 hours and hassle-free documentation.

OWNERS’ TOP PRIORITIES THROUGHOUT THE SALE CLOSING PROCESS

Source: car&bike Analysis

In contrast to this ideal situation, used car platforms are increasingly facing pushback from
vehicle sellers, with 30% dissatisfied over car pricing stated during the sale and 50% citing a
lack of transparency in post-sale documentation and liabilities as a reason.

60
EXPECTATIONS VERSUS REALITY WHILE SELLING A CAR

Source: car&bike Analysis

For the majority across both Metros and Non-Metros, the car was sold at a price which was
5,000 to 25,000 less than their expectation. Selling on used car platforms has unparalleled
incomparable potential to become the first choice for car sellers. By FY2026-2027, more than
8 Mn cars will be sold through used car platforms. Maruti Swift, Maruti Alto, Maruti Wagon
R, Maruti Dzire, Maruti Baleno, Hyundai i10, Hyundai i20, Honda City, Mahindra Scorpio, and
Mahindra XUV500 are the top ten cars sold in India.

6.3: TECH ENABLED PLATFORMS DRIVING GROWTH

What distinguishes the new generation used car platforms is their scientific and logical
approach to determining vehicle valuation and giving a complete and comprehensive vehicle
health report to validate the vehicle assessment.

Organized platforms, in turn, conduct thorough inspections on used cars bought from owners
and refurbish them to provide the next car buyer with a certified quality vehicle. While used
car platforms will play a significant part in inspections and price determination, AI-enabled
pricing algorithms such as IndianBlueBook pricing (IBB) can assist owners in determining
the range of vehicle pricing prior to an actual inspection. These pricing parameters take into
consideration historical pricing from the last 20 years.

To provide a successful selling experience, organised platforms must focus on two areas:
Provide world-class customer service and interact with clients in a way that avoids constant
persuasion. Organized platforms also provide the convenience of selling from the comfort of
your own home while enabling a safe and secure transaction with fast cash settlement and a
simple RTO transfer procedure.

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PART D
7: INKSIGHT: EXPERT INSIGHTS
7.1: THE PLATFORM REVOLUTION IN PRE-OWNED CAR SALES
Sangeet Paul Chaudhary – Founder, Platformation Labs
Platforms have emerged as a dominant market making mechanism across a whole range
of industries. Platforms typically connect buyers and sellers, more broadly producers and
consumers, and enable value-creating interactions between them.

Because platforms build large networks of counterparties to a transaction, we often

erroneously believe that the primary purpose of a platform involves counterparty discovery.
Instead, a platform’s primary purpose is transaction facilitation. In markets where products
and services are standardized and may be accurately valued, the primary barrier to transaction
facilitation is counterparty discovery. But in markets where products are not standardized and
cannot be accurately valued, counterparty discovery is necessary but not sufficient for the
creation of successful platform models. Entrepreneurs entering such markets with platform
models are often left perplexed when users fail to adopt their solution despite massive
investments in customer acquisition to aid counterparty discovery.

This is why efforts to build platforms to sell used cars have largely failed in markets around
the world. Companies that start out as platforms, eventually transform to acting as resellers.

In markets where products are not standardized and cannot be accurately valued,
platforms need to drive standardization and reliability to impute trust in the transaction.
Standardization reduces decision overhead on the consumer and reliability ensures that
consumers trust the platform’s valuation mechanism. With improvements in data science, the
used vehicle space is poised for a platform revolution today.

Building a used vehicle marketplace platform requires the creation of a quality standard for
used vehicles, backed with a valuation and liquidation mechanism that trusts that quality
standard. Moreover, vehicle inspections can be standardized, and a quality score developed.
Platforms that successfully transform the used vehicle sales market will need to ensure that
they own and set such a quality standard, backed by vehicle valuation data, which is accepted
across an ecosystem of financial service providers, distributors, and consumers.

Indeed, we are poised for a shift in how used vehicles are transacted -- a shift in value
that can be unlocked in secondary markets for vehicles. And the platforms that combine
standardization in quality and reliability in valuation will be the ones that win in this new era.

62
7.2: WIDE DATA AND AI – SOLVING THE PRICING
AND VEHICLE CONDITION CONUNDRUM
Anand Mahurkar – Founder & CEO, Findability Sciences
In today’s market, the right pricing approach is essential to remain competitive. In the case of
used car market, both selling and buying prices must be optimized to increase the business
volume as well as the profit. Even though increasing sales organization efficiency and reducing
the operational costs are important, price will be the biggest profit driver for used car business.
Therefore, determining optimum price is highly significant part of used cars business.

The used car pricing is a very complex phenomenon. There are multiple factors which
influence the prices. These can be divided into two main groups, as vehicle linked factors and
external factors.

The vehicle linked factors can sub-divided into readily verifiable factors like make, model,
variant, age; and Inspection factors like vehicle condition; and externally sourced factors to be
acquired or verified from third parties like insurance companies, such as accidents and claims
and from vehicle registration authorities like registration details, ownerships, etc.

The external factors will contain market related factors like new car market trends, used car
market trends, supply-demand dynamics at macro level and at micro level geographically,
regulatory factors like changes in emission norms, validity rules, etc., economic indicators,
new car supply forecasts, geopolitical issues, fuel prices, etc.

The huge product mix involving thousands of model variants at various stages of its life cycle
along with a complex business model involving institutional participants, dealer networks and
retail participants through various channels like B2B, B2B2C, C2C or Dealer to consumer (D2C)
add to the complexity of pricing.

There are thousands of model variants in the market, each having its own depreciation
behaviour which also has temporal factors that are different for different models and fuel
types. The electrical vehicles currently are in nascent stage; however, they will soon bring a
very different type of depreciation behaviour which will add to the complexity. Interestingly,
the prices change with the locations and the local, instantaneous demand & supply dynamics
play its role in adding spice to it.

Sudden significant price changes have been observed in the market due to certain events
like closure of manufacturing of new cars for a specific make in a particular geography. Other
events like corporate announcement for car recalls due to faulty parts or chip shortages for
new car manufacturing also influence price changes.

It has been observed that the prices of used cars are on rise over a considerable period of
time for various reasons, however, consumer behaviour change due to pandemic where
personal commute is preferred over public transport caused it to accelerate.

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The traditional process of price determination is either based on some expert’s gut feeling
or based on certain rule-based model. In both these cases, the complex interplay of all the
factors influencing the price does not get captured in an unbiased way. Another challenge
with these methods is that they lack the agility to capture the changing relationships between
the factors and sudden changes in the impacts.

The vehicle condition factors like engine condition influence price of a used car, these
assessments consist of certain tests, and visual inspections. These involve human subjectivity
in the assessment and add error in the price determination.
Another derived factor from vehicle linked factors is estimation of refurbishment cost so that
a used car dealer can increase the value of the vehicle by refurbishing it before he sells it.

All these complex relationships exist in the data related to vehicles and their prices;
however, it is humanely impossible to unearth these insights and implement them for price
determination. It needs sophisticated AI to identify and model these relationships.

When it comes to AI, these are Machine Learning Algorithms which can learn, co-relate,
predict, and reason the intended outcome, often called as Target Variable (TV). The price
is the TV for solving the challenge of used car prices. AI needs data to learn and it’s the
historic data which makes the algorithms smarter. For successful AI implementations, Wide
Data is a must.

Wide data is the data with Variety and Veracity. The AI to predict the price will need wide data
containing internal and external data of structured and unstructured type. The external data
from third parties as well as publicly available like news, social chatter will help in sensing
the latest trends and triggers. AI solutions for predicting refurbishment costs, and computer
vision-based inspections of vehicle add power to the entire process.

The pricing trends are very dynamic and location sensitive and are subject to data drift.
Therefore, a strategic data refresh policy for AI model is very important to stay relevant.

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7.3: SELLING CARS ONLINE – IS PHYGITAL THE WAY OUT?
Rob Huting – Corporate Development, Vice President at Cox Automotive Inc.
Are consumers ready to buy cars online, and will the traditional dealership become a
thing of the past?
Watching Carvana and Vroom ads on US TV you would think the only way to buy a car is
online. Watching the investment landscape in the US and Europe you see a lot of M&A activity
in the automotive digital retail sector and not just online retailers, but also related companies
like online auto financing, online marketing, and merchandising. Everyone getting ready for
online car buying.

Full disclosure, I found my last 2 cars online, arranged purchase without visiting the dealer,
and had the cars delivered to my driveway. So, I am a fan. But one swallow does not make a
summer. Is full online retail the future?

Cox Automotive does an annual car buyer journey study to get the pulse of the market. When
asked if they would buy a car without a test drive, ~70% of consumers stated that they would
never buy a car without a test drive. If they were told that they could get their money back
after purchase, this number dropped to ~60%. So, 60-70% of the consumers are not ready to
buy a vehicle without visiting the dealer.

A recent McKinsey study among consumers in the US, China and Germany showed that
consumers prefer a journey where interactions happen in the dealership, and online. People
prefer to see, test drive, and pick up the car at the dealership. Information gathering,
quotation, financing and contracting are interactions they prefer to be online.

McKinsey’s study mirrors what Cox Automotive finds in dealer studies. 55% of franchise
dealers and 39% of independent dealers say consumers are completing more steps online.
78% of franchise dealers and 67% of independent dealers believe that more consumers will
buy online in the future.

Going back to the Car buyer journey study, what would make consumers more likely to
buy online?
Three options scored 80%+ to increase wiliness to buy online: test drive delivery, expanded
warranty and a money back guarantee. A 2021 Autotrader UK study found the top two
reasons consumers buy online are: better selection and better value. This is in line with my
own experience. I buy cars online with a certified pre-owned warranty, and I test drive locally,
but then find the best selection and price online.

What does this mean for the initial question? I do not believe that dealerships are headed for
extinction. US sales numbers show that with all the investment and marketing less than 5% of
cars are completely sold online. Consumer studies show that 30-40% are open to buying a car
online. 60-70% are not.

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So, if I had a dealership, I would leave it up to the consumer. I would ensure all my cars were
well merchandised online. I would give consumers the option to complete some or all the
journey online, whatever they are comfortable with. And provide my team the tools to make
the journey easy.

7.4: EMERGING BUSINESS MODELS AND SUSTAINABILITY

Jignanshu Gor – Chief Strategy Officer, Mahindra First Choice Wheels
Historically, pre-owned car industry has been evolving constantly. Nowhere has a model settled
down or a single winning model emerged. This evolution typically follows the evolution and
speed of the new car industry globally. This is natural as the new car industry feeds the ‘raw
material’ for the used car industry.

Traditionally, in all markets, the pre-owned car industry is unorganized. It is small, with low
profits and does not attract the attention of large corporate players or investors. Over the last
few years, however, led by technological innovation and changes in customer preferences, the
pre-owned car industry has been evolving rapidly.

Till mid-2010, there were 2 broad business models in play globally:

(a) Transaction-led models: this is about dis-intermediating the existing sales channel of
unorganized dealers by an organized player. The transaction can be about buying car
from consumer (so called C2B model) or selling car to consumer (so called B2C model).
The most famous example here is CarMax
(b) Services-led models: this is about offering services to existing players in the used car
ecosystem. Examples include offering leads packages to help dealers’ sell cars or helping
them with pricing guidelines or running a commission-based auction platform to help
them buy cars etc. Some examples here are Cox, Cars.com, AutoTrader.uk, Carsales etc.

A look at the industry developments globally indicates rise of phygital marketplaces is imminent.
The 4 key trends we see solidify over the next few years are:

(a) Digital retailing is gaining traction: This does not necessarily mean selling cars completely
online but bringing those parts of the transaction journey online which will clearly benefit
from current e-Commerce tools available. This may include steps like research, browsing,
to identify specific cars of interest, booking a test-drive at home, arranging for warranty-
finance-insurance for the vehicle etc. Most new-age players like Carvana, Cazoo have
done it well globally.

(b) Retail transactions are the key metrics being chased: Most businesses which focused on
service-led models, are attempting to add transaction metrics (classifieds-based sales
package to conversion-based income). Interesting examples of this trend at Carsales,
AutoScout24 and others.

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 (c) Procurement from institutional sources becoming important: While digital retailers
started by disrupting the C2C (buy from consumer, sell to consumer) landscape, they
are realizing the important of low-cost supply which can be obtained from institutional
sources (leasing, fleet, financial institutions). However, accessing this supply needs
capabilities of inspection, storage, auction across vehicle categories. This is being seen by
the partnerships created by Constellation acquiring CarNext to lock-in off-lease supply
and focus from Aramis, AutoHero on trade-in vehicles.

(d) Vertical stacks giving way to marketplaces: Players are forming partnerships to aggregate
supply on their platforms. Most players that started as a full-stack end to end model have
by Carvana, Cinch, HeyCar etc. displaying their own inventory and dealers’ inventory on
their platforms.

The nature of a nascent industry is to keep evolving. And we believe the Indian journey has
just begun!

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8: CONCLUSION
Despite many challenges, the used car market is alive and kicking, and all set to show a sizable
growth and development in the near future. This holds true for the used car market at the
global stage as well as for India’s used car industry. A judicious mixture of physical presence
of a buyer for test drives and the use of sophisticated digital platforms is a good piece of
news for both the consumer and the seller. Over the years, it has been observed that the trust
deficit between a buyer and seller has considerably reduced, thanks largely to transparent,
smooth, safe, secure and swift transactions in the last four-five years.

The off-putting experience of the days gone by is almost over, as the role played by brokers
and unorganised platforms is on a steady decline. Modern day ambitious buyer has more
access to knowledge and data, thus paving the way for informed choices in relation to
buying a used car. Regardless of a customer’s desire to own an average vehicle or an
upgraded pre-owned car, research and data continue to play a decisive role. Furthermore,
artificial intelligence will continue to provide succour to both buyers and sellers, thus
enabling the used car industry to get bigger and bigger. Pertinently, buyers of old cars
belong to various socio-economic platforms, thereby helping the used car market to
expand, evolve and grow further.

Upward mobility of India’s aspirational youths and their desire to own a car for personal
mobility, conveyance, security, social status and fashion statement will only mature further.
The Indian used car market is expected to flaunt a CAGR of 19.5% by value and 12.7% by
volume during the period FY2022-2027.

Our research study establishes the fact that consumers are inclined to purchase used cars
due to the accessibility of finance options. Moreover, the COVID19 pandemic too has acted
as a vehicle to prompt consumers to buy old cars for personal mobility while ensuring that
maintaining good health remains one of their priorities. As far as India is concerned, the good
news is that the automotive industry will rock in the midst of a digital explosion! The future of
used car industry is safe, stable, and solid.

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9: TIPS FOR BUYING & SELLING A USED CAR:
KEEP IT SIMPLE, ACT SMARTER
First things first: Used cars these days have better safety features and more tech gizmos than
models from a decade ago. Hence, buyers do not want to let go the opportunity to purchase
a used car for half the price of a new car, and that too without the burden of a loan and
interest. With rising interest rates, there has been a significant drop in the number of people
acquiring new cars. As a result, the used car industry is here to stay. Another aspect is that car
enthusiasts typically like to own the latest models, and purchasing a new car rather turns out
to be costly for such buyers. Thus, investing in used cars is not only a pragmatic decision, but
also suitable and sensible choice.

But let’s face it: Some end up being sold a beat-up clunker with grimy seats. Many Indians
make huge mistakes while buying used cars. They often buy from un-trusted and un-organized
sources without any safety net of warranty or detailed inspection reports. A third of these
buyers are staring at a heavy markdown due to being sold a ‘lemon’ or ‘damaged’ vehicle.
Ouch! That is neither smart nor a winning personal finance strategy at all.

On the flipside, while selling the car to a circle outside of friends and family such as
untrustworthy garage owners, middlemen, and agents can bring in complications in form
of delayed transfer of documents, unauthorized use of vehicle before transfer and lack of
transparency post sale. Hence, the best way to sell the hassle-free way is by selling your
vehicle to an organized used car player from the comfort of your home.

Hey, don’t worry! car&bike’s Buying & Selling Pre-checklist kit is here to offer help and true
value for money. Here’s a guide how to buy a used car without getting cheated or paying
more than you must:

Things to check ‘before and after buying a used car’:

If you don’t want to be taken for a ride, make sure that you properly inspect the vehicle’s
documentation. This is a must under all circumstances. Furthermore, ensure that the seller
notifies the Regional Transport Office (RTO) where the vehicle was registered within a week
after purchasing the vehicle.

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DOCUMENTS YOU SHOULD HAVE IN YOUR POSSESSION FROM SELLERS
BEFORE CLOSING THE DEAL:
Detailed Inspection The report should include a full description of the vehicle’s interior and
Report exterior conditions at the time of inspection. This point report gives
openness and allows the buyer to acquire a high-quality car. It also helps
you to get a greater price in organized used car platforms if you decide to
go forward with a car buyback option in the future. Most organised used car
platforms offer a free 140–200-point inspection report prior to a purchase.
Registration Certificate This is the most crucial document since it contains vital information about
(RC) the car you want to buy, such as the chassis number and engine number.
If the car is old or has been damaged in a serious accident, the engine
may have been replaced. Therefore, please make sure the RC has the new
serial number. Also, ensure that the word DRC, which stands for Duplicate
Registration Certificate does not appear on the certificate. If it does,
inquire with the seller on the complete details
Service Book You should go through the service history of the vehicle since it will reveal
to you the condition of the car. A vehicle that has been serviced on time
and through authorised centres will be in a better running condition than
one that has been not serviced frequently.
Road Tax Receipt This tax is a one-time payment, which should be paid by the first owner of
the car when he registers the vehicle. If it has not been paid, the penalty
can run into lakhs of rupees over time, and you, as the new owner, will have
to bear this financial burden. The tax varies from State to State, so you
should ensure that the seller provides you a receipt for the tax paid.
Insurance After purchasing the desired used car, have the insurance transferred to your
name; else, it will be difficult to submit a claim in the event of an accident.
Verify and see if the premium has been paid on time, the policy’s expiry date,
and if insurance has ever been claimed while transferring the policy. The
latter will inform you whether the car was involved in an accident. Determine
whether the vehicle has third-party or comprehensive insurance. If the
insurance has expired or is about to expire, you might negotiate a lower
price for the car with the seller. It should be noted that obtaining insurance
for a used car that is more than 14 years old will be challenging.
Forms 28, 29, 30, 32, Forms 29 and 30 are required documents when purchasing a used car in
and 35 India. The seller must sign two copies of Form 29 and one copy of Form
30 and deliver them over to the buyer as part of the used car registration
procedure. The buyer will then submit it to the RTO for ownership transfer:
1. Form 29: Notice of transfer of car ownership
2. Form 30: Application for the intimation and transfer of car
ownership
3. Form 28: No Objection Certificate that is mandatory when the car
ownership is transferred between states
4. Form 32 and 35: You will need these documents if the previous
owner had taken a loan to purchase the car. Before buying, ask the
seller to give you a copy of the No-Objection Certificate (NOC) from
the finance company which will clarify that the entire loan has been
paid. If you do not take care of this detail, you could land in trouble.
For, after you take possession of the car and the registration
certificate is transferred in your name, the lender may ask you — as
the new owner — to pay the pending loan

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Proforma & Receipt Once the vehicle is finalized, the dealership would share a soft proforma
document before the invoice is generated, which highlights complete
details of refurbishment undertaken, payment terms and handover details.
Make sure to receive the multiple payment receipts if you choose to make
a full payment in parts within the agreed period.
Financing In case you wish to take financing, the dealership takes care of
documentation and brings in the best quote.
1. Approval is confirmed within 2-3 days but transferring funds takes
6-7 days
2. Rate of interest on used car starts from 11%, it extends to 15% -
depending on customer’s profile & CIBIL score. A few players such
as Mahindra First Choice (car&bike) do offer financing at 11%
3. All banking partners provide a loan on used cars for a maximum
tenure of 5 years
4. Transfer is a big challenge; hence organized used car players take
care of end-to-end documentation of financing and RTO transfer
You should seek clarity on the Interest, Documentation fee, Stamp duty
charges, Valuation charges, Loan cancellation charges, Penalty on delayed
payments.
Roadside Assistance Make sure your dealership provides a 1–2-year warranty with a coverage
(RSA) & Warranty of 15,000 - 25,000kms. Clarify whether the warranty provided is
comprehensive or only covers engine & transmission. You do not want to
be left in a lurch in case of a breakdown of vehicle, hence ensure that RSA
is provided as part of the warranty
Car purchase invoice A dealer or a company will provide you a printed bill along with the car.
Ensure you get a commitment in writing for RC paperwork and transfer
completing within the stipulated 90 days. However, this may not be
possible if you are purchasing the car from an individual or broker

Documents you should have in your possession from sellers before closing the deal:

Buying from an organized dealership is less cumbersome as they take care of the transfer
of insurance and RC in the name of the new owner. However, verify that you are purchasing
directly from the previous car owner and that the vehicle has not been transferred in the
name of the dealer.

A few organized used car players such as Mahindra First Choice’s (car&bike), and Volkswagen’s
(Das WeltAuto) have dealerships present across 300+ cities. Buying a used car from
organized multi-brand dealerships is the safest and easiest option since all the checks
and documentation are done thoroughly by the company, which means that it will require
minimum overseeing by the buyer.

Not only is the car serviced properly before being sold, but the platforms will also offer
free test drives, warranty of 2 years, detailed inspection report, speedy financial assistance,
roadside assistance, couple of free servicing’s and vehicle buyback. Another advantage is that
in case of any issue, you have an assured place to address your grievances.

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Things to check ‘before and after selling a car’:
When selling a personal car to untrustworthy buyers, Indian seller impulses are always guided
by the value recovered on the vehicle, with little focus on the post-selling process. This can
lead to lawsuits and RTO penalties if the vehicle is misused by buyer before the transfer is
completed. To avoid this situation, individuals are more likely to be at comfort while selling
vehicles to organized used car intermediaries. These platforms not only provide a better value
for the vehicle backed up a detailed inspection report, but also have a robust process to take
care of the end-to-end documentation and RC transfer process.

HERE’S A LIST OF MANDATORY DOCUMENTS/ITEMS YOU NEED TO SHARE

WITH BUYERS BEFORE CLOSING THE DEAL AND WHICH WOULD HELP YOU
GET THE FINAL QUOTE:
Registration Certificate This is the most crucial document since it contains vital information about
(RC) the car you want to sell, such as the chassis number and engine number.
If the car is old or was in a serious accident, the engine may have been
replaced, therefore be sure the RC has the new serial number. Also, ensure
that the word DRC, which stands for Duplicate Registration Certificate,
does not appear on the certificate. If it does, it must be highlighted with
complete details at the time of sale
Insurance When selling a personal car, you have the option of retaining the existing
valid insurance to benefit from the “No claims” bonus or you can choose to
surrender the insurance at the time of sale. However, the final price of the
car will be affected by the above choices. If the insurance has expired or is
about to expire, you might receive a lower price for the car
Forms 28, 29, 30, 32, Forms 29 and 30 received at the time of purchase are required to be
and 35 submitted when selling a used car in India. The seller must sign two copies
of Form 29 and one copy of Form 30 and deliver them over to the buyer as
part of the used car registration procedure. The buyer will then submit it to
the RTO for ownership transfer:
1. Form 29: Notice of transfer of car ownership
2. Form 30: Application for the intimation and transfer of car
ownership
3. Form 28: No Objection Certificate that is mandatory when the car
ownership is transferred between states
4. Form 32 and 35: If you obtained a loan to buy the car, you’ll need
to submit these documents. Before selling, you must obtain a copy
of the financing company’s No-Objection Certificate (NOC), which
confirms that the full loan has been paid. This process is managed
by organised used car platforms, who coordinate with your financial
partner for paperwork.
Duplicate Keys This has a direct impact on the final quote in addition to the detailed
vehicle report that is generated post inspection of the vehicle by car
experts from organized used car platforms
Token Amount Once you agree to the car quote, organised platforms will offer you with a
refundable token sum ranging from Rs. 1,000 to Rs. 10,000. Make certain
that you seek the cost of not continuing the transaction later for any reason.
Optional Elements Car sellers can optionally also share the PUC certificate, Owner Manual
Book, and Service book. However, adherence to the mandatory list above is
necessary to help determine the ultimate car valuation

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Selling a car to organized multi-brand dealerships is the safest and easiest option since all
the checks and documentation are done thoroughly by the company, which means that it will
require minimum overseeing by the seller. They also provide a hassle-free experience and
enable you to sell a car from the comfort of your location. For example, once you have sold
the car to these platforms, they will ensure the registration certificate process is handed to
the new owner and that the vehicle is not misused while it is in their dealerships.

10: RESEARCH METHODOLOGY

The findings presented in the report have been arrived through primary and secondary
research.

PRIMARY RESEARCH
The consumer and dealer studies were conducted in liaison with car&bike and Das WeltAuto.
This survey was done at a pan-India level with (N=1000) respondents surveyed throughout
the report. This research included Metro and Non-metro cities like as Mumbai, Delhi NCR,
Guwahati, Pune, Kochi, Hyderabad, Jaipur, and Bangalore, among others.

SECONDARY RESEARCH
Secondary Research was done to identify the market structure and dynamics of the used car
market in India. Information was collected from various internal and external sources and
analysed thoroughly for validating the primary data.

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11: WHO WE ARE
Mahindra First Choice (car&bike): Mahindra First Choice Wheels is a brand you can safely
place your complete trust in. It is India’s top multi-brand “phygital” used car platform firm,
organizing the market by aggregating demand and supply.

On the demand side, the firm serves customers by selling 140+ point certified cars through
its 320+ Dealerships and 8+ car&bike Superstores, each of latter housing 100+ cars and
has a retail network reaching over 1000+ touch points in 400+ cities. These offline stores
are complemented by a seamless digital platform accessible through www.carandbike.
com, which offers special benefits such as a two-year warranty, a seven-day return policy,
roadside assistance, and buyback with fast cash offers. As a result, it is a one-stop shop for
consumers in India who want to buy or sell old cars, either in-store or online.

car&bike is one of India’s topmost Auto-Tech websites by traffic, providing quality auto
content as well as a digital marketplace for buying and selling used cars. More than 30
Mn users log into the website every month and hosts “The car&bike Show” and “car&bike
Awards,” which are presented by India’s leading auto journalist, Siddharth Patankar.

On the supply side, the company provides end-to-end services to various banks, NBFCs, and
commercial partners to liquidate vehicle assets via its auction platform, as well as detailed
vehicle inspections in 8500+ pin codes using the industry’s best India Blue Book pricing
algorithm and offers parking services at 700+ secured yards.

Das WeltAuto (DWA), the pre-owned car platform by Volkswagen Passenger Cars India

Das WeltAuto is the certified pre-owned car business of Volkswagen Passenger Cars India. It’s
a one stop solution that facilitates buying, selling and exchange of multi-brand pre-owned
cars. It offers a comprehensive 154 check point inspection on pre-owned cars and enables
customers to utilize the expertise and extensive network of 105 DWA outlets in making
informed decisions.

The DWA platform also conducts the necessary due diligence and certifies the vehicle along
with offering a warranty, service value packages, accessories options, extended warranty and
maintenance program for its customers.

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 SPECIAL THANKS TO
Ashutosh Pandey – MD & CEO, Mahindra First Choice Wheels
Ashish Gupta – Brand Director, Volkswagen Passenger Cars India
Kumar Priyesh - Head of Sales, Volkswagen Passenger Cars India
Sangeet Paul Chaudhary – Founder, Platformation Labs
Anand Mahurkar - Founder & CEO, Findability Sciences
Rob Huting – Vice President - Corporate Development, Cox Automotive

REPORT, RESEARCH, COMPILATION, DESIGN AND LAUNCH

Jignanshu Gor – Chief Strategy Officer, Mahindra First Choice Wheels
Abhishek Agarwal – Marketing Head, Mahindra First Choice Wheels
Nisarg Swaly – Senior Strategy Manager, Mahindra First Choice Wheels
Mrigesh Wadhera- Senior Manager IBB & OEM Relations, Mahindra First Choice Wheels
Indraraj Sarkar – Head of Corporate Sales & Pre-Owned Cars,
Volkswagen Passenger Cars India
Sreejith Menon – Regional Manager – Corporate Sales & Pre-Owned Cars,
Volkswagen Passenger Cars India

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