New Delhi:
India’s used car market has quietly rewritten its own story. What was once seen as a backup option is now emerging as a smart, first-choice purchase for millions of buyers. According to Gears of Growth: The 2025 Indian Used Car Market Report released by Cars24, the sector is becoming more mature, digital, and sharply value-driven — with buyers making informed, need-based decisions rather than emotional, seasonal ones.
Unlike the traditional festive spikes that define new car sales, the used car market is displaying remarkable consistency. Each month contributes between six to ten percent of annual sales, signalling that consumers are purchasing vehicles when necessity strikes rather than waiting for auspicious calendar dates. In simple terms, practicality is overtaking impulse.
Technology is playing a decisive role in this transformation. Car research has firmly gone digital-first, with more than 1.7 lakh searches recorded for Pre-Delivery Inspection in 2025 alone. Buyers are increasingly relying on reviews, expert videos, and detailed online content before finalising their purchases. Artificial intelligence, meanwhile, is emerging as the new-age car consultant. AI-led searches have risen 6.7 times year-on-year. Searches related to buying cars have grown 7.2 times, new car searches have increased 8.1 times, and compliance-related queries such as challans have surged ninefold. Indian consumers are clearly not just browsing — they are investigating.
The geography of demand is also shifting. Maharashtra leads the used car market with a 20.1 percent share, while Karnataka has grown from 10 percent to 16 percent and Gujarat from 8.7 percent to 13.1 percent. In contrast, Delhi’s share has fallen sharply from 13.8 percent to 5.8 percent, underlining a broader decentralisation trend. Tier-2 cities now account for 62 percent of used car purchases, proving that the next wave of automotive growth is unfolding beyond metro skylines.
Buyer preferences continue to reflect a careful balance between aspiration and practicality. Hatchbacks remain dominant with a 52 percent share, thanks to affordability and ease of urban driving. SUVs have expanded their footprint to 32 percent as customers seek higher ground clearance and stronger road presence, while sedans have slipped to 16 percent. The Maruti Suzuki Baleno has emerged as the most popular used car with a 15.5 percent share, followed by the Hyundai Grand i10 at 13.2 percent and the Renault Kwid at 11.3 percent. Models such as the Tata Nexon, Tata Tiago, Hyundai Elite i20 and Honda City also continue to see strong demand, highlighting the preference for trusted nameplates with proven resale value.
Affordability remains central to the decision-making process. The average selling price has settled at ₹5.47 lakh, making used vehicles significantly more accessible than their brand-new counterparts. Lower GST compared to new cars further enhances their financial appeal. Petrol-powered cars dominate the market with an 84.5 percent share, largely due to their suitability for urban commuting, while manual transmissions account for 72 percent of sales, though automatics are gradually gaining traction in metro markets. When it comes to colour, practicality once again wins. Silver remains the most preferred shade, and together with white accounts for 57 percent of cars sold, reflecting India’s enduring love for neutral, resale-friendly tones.
Financing has become a key enabler of this growth story. In 2025, 52 percent of buyers opted for loans, with the average EMI standing at approximately ₹11,400 per month. Financing adoption is even stronger in non-metro markets, supported by expanding digital lending platforms and quicker credit approvals. The ease of structured payments has made pre-owned cars accessible to a wider demographic, further reinforcing their status as a practical first choice.
Based on internal data from Cars24 as of December 2025 and insights drawn from over 33 million users across India, the report underscores a clear evolution in consumer behaviour. The used car market is no longer defined by compromise. It is defined by calculation, confidence, and convenience.
In 2026, the Indian car buyer isn’t simply looking for the cheapest option. They are looking for the smartest one — and increasingly, that car comes with a previous owner but a very deliberate decision.
