India’s pre-owned car mkt to reach $100 bn by 2034: Cars24 Co-founder

While 69% of the buyers have sought for car loan in Hyderabad, the number is lower at 60% in other cities we are present. We have been recording 30% y-o-y increase in loan disbursements in Hyderabad – Ganjendra Jangid, Co-founder, Cars24

Cars24, an autotech company on Friday said that the pre-owned car market in India is likely to multiple four times over the next 10 years, from $25 billion in 2024 to $100 billion in 2034. A growing preference for car financing, led the company to launch a NBFC, Cars24 Financial Services Pvt Ltd in 2019. Since its launch, Cars24 has disbursed Rs 497 crore in loan to 69 per cent of its overall customer base here, in Hyderabad.

The car models such as Hyundai Elite i20, Hyundai Grand i10 and Maruti Suzuki Baleno is prefered by young professionals in this city, wherein 70 per cent of their customers are first time car buyers falling in the age group of 30 to 35 years.

“While 69 per cent of the buyers have sought for car loan in Hyderabad, the number is lower at 60 per cent in other cities we are present. We have been recording 30 per cent y-o-y increase in loan disbursements in Hyderabad. Credit facility from NBFC’s like Cars24, banks not into lending loans for used cars, higher disposable income, and increase in demand for owning cars as part of better standard of living, has been leading to the growth of our loan book,” Co-founder of Cars24, Ganjendra Jangid said.

The financing option of Cars24 includes an average interest rate of 15 per cent for an EMI of Rs 11,500 for a period of 63 months. Depending upon the credit rating of the customer, from 80 per cent to the total car value is financed by the company, Jangid informed. By end of this year, the company will be extending used car loan to customers of other platforms too. The used car market (organised and unorganised) in India is growing at a CAGR of 15 per cent y-o-y, Jangid highlighted adding that this category is likely to multiple four times over the next 10 years, from $25 billion in 2024 to $100 billion in 2034. Five years ago, people used to switch to a different car every seven to eight year, which has now come down to five years, Jangid added while stating one of the factor that will drive the growth of this market.

“Of the $25 billion pre-owned car market, Cars24 holds a share of over five per cent. The highest share in sales for the company comes from Delhi NCR, at 30 per cent. While Hyderabad stands third as a market for Cars24, after Delhi NCR and Bangalore, at 15 per cent,” the Co-founder said. In Telangana, Cars24 procures 1,000 used cars from 10 cities every month, of which 400 is sold directly to customers, and 600 to dealers/channel partners.