What do you appreciate more? The feel and the smell of the new car or a few extra thousands of dollars in your bank account that you saved by buying a used car? Have you wondered what other people tend to choose? In this article, we will try to answer a couple of questions like how big is the used car market, where has it been, and where is heading.
When it comes to the used car market, there have been a few changes too mainly caused by factors like economic development of countries that have been previously seen as third world countries, new environmental policies in the first world countries, and the sheer need to avoid the use of public transportation due to the raging pandemic.
Regardless of these changes, there has always been and will be a steady demand for well-maintained used cars because of many factors including the first-year depreciation (i.e. a new car loses 20% of its value the minute you drive it off the lot). If your interest in the used car market is due to the fact that you are planning to buy a vehicle for you and your family, be sure to research the best car insurance you can get before you go to the lot.
Without further ado, let's dive into some current statistics.
Used Car Market Statistics Overview (Editor’s pick)
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Used Car Market Statistics by Region
North America retains the largest used car market share in general while Latin America, Middle East, & Africa (LAMEA) are now the Fastest-Growing Region in the Market.
However, further used car market research and a deeper look at the global automotive market share in terms of shipping, show that in 2019, the Asia Pacific accounted for the largest piece of the pie with a staggering 35.6 %. This percentage is expected to grow mainly due to the booming purchasing power and demand from China, India, and other Asian countries.
The current status of the used car market is considered to be favorable for investment and it reflects the socio-economic changes caused by many events some of which have their roots even in the Great Recession (2007-2009) but also in the current pandemic.
(Source: Grand view research)
Used Car Market Insights
Petrol-powered vehicles still hold the largest volume share of 43.1% in 2019
This number will probably not surprise anyone, however, according to the car market report the number of sold vehicles powered by NG, LPG, CNG, and ethanol is rising in developing countries as well as the number of electric vehicles in the developed ones. The used car sales statistics tell us that these vehicles are usually sold or traded in to vendors who ship them to a different state or even a different country, give them a nice polish, and slap on a new price tag.
You can still buy a used vehicle from an individual by looking up the ads on craigslist but the organized vendor segment accounts for the largest volume share of 71.8% in 2019. This is because of the rising number of franchised dealers who earn higher gross profits on used vehicle sales than independent dealers by acquiring the vehicles through trade-in systems. Also, the organized vendors benefit from brand recognition and greater consumer loyalty across all age groups. All of this is creating a sort of used car market bubble causing the vendors to launch aggressive marketing campaigns in order to compete with each other.
(Source: Grand view research)
Size of the Used Car Market
Around 40.8 million used vehicles were sold in 2019 in the United States. In contrast, only 17 million new vehicles were sold in the same year.
As you can see the number of used vehicles sold in the United States in 2019 was double the number of new ones and that should give you an idea of just how big is the used car market. According to the statistics, most of those new vehicles sold in the US during the past two years were light-duty trucks (pickup trucks). Offline sales accounted for 78.3% in 2019, but that number has likely drastically changed in 2020 due to the pandemic.
(Source: Statista)
There are about 280 million vehicles cruising down the roads in the United States and their average age is 11.9 years.
In some European, Asian, and African countries, this number even goes up to 17 years of age. All of these vehicles generate further profit for gas companies, those whose jobs are to maintain them, spare parts makers, and governments who collect numerous taxes that come with the luxury of owning a vehicle. Keeping all of those factors and numbers in mind the next piece of information that you are about to read should not surprise you.
(Source: Statista)
The global used car market size was estimated to be worth USD 1,332.2 billion in 2019.
Also, this amount is expected to grow at a compound annual growth rate (CAGR) of 5.5% from 2020 to 2027. Those numbers represent just the sheer value of the vehicles being resold and do not account for all of the extra money that is being reflowed when those vehicles change owners, are being used and maintained. It is easy to see why some of the richest countries in the world also happen to be the biggest car manufacturers.
(Source: Grand View Research)
Used Car Market Predictions
Researchers expect the Electric Category To Be Faster-Growing during Forecast Period
It is difficult to make any predictions due to all of the unforeseeable circumstances we have gotten ourselves into in 2020 but the current used car market sales trends suggest that the demand for used cars will continue to grow and cause further increases in prices in the near future. It is worth noting that gasoline prices have reached their all-time low in 2020 due to the pandemic, which further motivated people across the world to get behind the wheel but at the same time economic uncertainty and instability got them to opt for cheaper used cars instead of the brand new ones.
On the other hand, further used car industry analysis shows that those with a bit deeper pockets so to speak have been charmed by new players in the game (electric car makers) who are proving to be true game-changers as the prices of used electric vehicles continue to stay relatively high and depreciation seems to be affecting them less compared to the ones using fossil fuel.
Whether you do it by starting to count all of the electric cars on the highway on your way to work or by going through the electric cars statistics, you will probably come to the same conclusion and that is that the future belongs to electric vehicles. This also proves to be an extremely important factor to keep in mind for those who are thinking about buying a new vehicle and for those trying to do a used car market analysis.
(Source: P&S Intelligence)
Final Thoughts
Business circumstances during the past year have been convoluted, to say the least, for many industries and markets including the used car market. Also, we have been all locked up for several months and it is difficult to get a feel of the field when a small laptop screen has become your window to the world but hopefully after reading this article and looking at the statistics you should have some idea of how big is the used car market right now.
For most families around the world, purchasing a vehicle represents an important financial decision and one that is not taken lightly. If you have decided to pull the trigger and get yourself a car, whether it be a used one or a new one it would be worth looking at the current auto loan statistics. In the end, you might find it to be worth investing a little bit more money and making your purchase somewhat future-proof by buying a used electric vehicle.
