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Used-car sales to expand 8-10% in FY26, outpace new vehicles: Crisil
The used-to-new car sales ratio has increased to 1.4 from less than 1 five years ago. The market value of used cars is estimated to be around ₹4 trillion, nearly matching that of new car sales.
Crisil's analysis of six organised used-car companies — including CarDekho, Cars24, CarTrade, Spinny, Mahindra First Choice, and OLX-backed platforms — shows that revenue growth is expected to help players break even at the operating level in the next 12–18 months. Until then, liquidity and timely fund-raising will be critical, especially as most companies are still incurring cash losses due to high operating costs tied to logistics, refurbishment, and customer acquisition.
Used-vehicle sales grew 8 per cent in FY25, rebounding from the slow 5 per cent annual growth between FY17 and FY24. This growth trajectory is expected to continue into FY26. However, India still trails global markets in used-to-new ratios, with the United States at 2.5, the United Kingdom at 4.0, and Germany at 2.6.
'The rising used-to-new car ratio suggests a shift in buyer behaviour, driven by digital platforms, faster upgrade cycles, and a growing preference for utility vehicles,' said Anuj Sethi, Senior Director at Crisil Ratings. The average age of used vehicles sold is declining and expected to fall to 3.7 years, down from 5.3 years in FY17.
The segment also benefited from disruptions in new car deliveries caused by global semiconductor and rare-earth magnet shortages. Pre-owned vehicles have become an alternative for buyers seeking immediate ownership, while first-time buyers are finding more options in the used segment thanks to strong new vehicle sales in recent years.
Despite topline growth, profitability remains elusive. 'High cost of customer acquisition, logistics and refurbishment continues to weigh on the operating margin, which remains thin or negative for many players,' said Poonam Upadhyay, Director at Crisil Ratings. She noted that integrated offerings — such as financing, insurance, doorstep delivery, and inspection services — may help reduce losses over time.
Crisil data indicates that revenue for the six analysed players rose from ₹6,536 crore in FY22 to an estimated ₹16,500 crore in FY26.
Despite losses, these companies maintain cash buffers from earlier fund-raises and are planning capital expenditure of ₹800–1,000 crore this fiscal, primarily to expand inspection hubs and improve technology. Since FY19, organised players have collectively raised over ₹14,000 crore in equity.
Bank lending has remained tight for this sector due to continued cash burn but could revive — particularly for inventory-led platforms with physical collateral.
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