India’s used-car volume to grow 8-10% in 2025-26, over twice as fast as new cars: Crisil

The sales volume of used cars in India is expected to cross 6 million units this fiscal driven by value-conscious demand, rising digital adoption and better access to finance, the credit rating agency Crisil Rating said in a report.

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This has lifted the used-to-new ratio in car sales to 1.4 from less than 1 five years ago, with the volume growing more than twice as fast.

After a tepid 5 per cent volume growth seen between fiscal 2017-24, used vehicle sales grew at a strong 8 per cent last fiscal and is poised to grow up to 10 per cent this fiscal too, said the credit rating firm.

The market value of these used cars is estimated to be around Rs 4 lakh crore, nearly matching that of new car sales.

The organised players in the segment have been incurring high operational cost towards refurbishment, logistics and financing as the sector is in an expansion mode, resulting in continued cash losses.

However, strong revenue growth is expected to drive breakeven at the operating profit level over this and the next fiscal. Until then, credit profiles of players will largely depend on timely fundraising and sustenance of adequate liquidity to support growth.