High prices, legal hurdles and trust issues deter first-time buyers from used cars
India’s used car market is seeing reduced interest from first-time buyers, with concerns over pricing, trust and legal complexities driving many towards new vehicle purchases instead. A recent nationwide study conducted by Park+ Research Labs reveals that 77% of first-time car buyers in India opted for brand-new vehicles in the past year, signalling significant doubts around the second-hand vehicle market.
One of the primary concerns highlighted by buyers is pricing. Approximately 81% of respondents believe that used car prices are often inflated, sometimes comparable to the price of a new car. This sentiment is especially prevalent in the under Rs. 10 lakh category, where nearly 90% of second-hand car transactions take place, according to a Deloitte analysis.
Many buyers perceive new cars as offering better value, given improved financing schemes, manufacturer warranties and reliable after-sales support, making them a safer bet for inexperienced car owners.
Even among those who initially considered buying a used car, negative experiences played a significant role in changing their minds. About 65% of these individuals cited peer warnings, poor online reviews or personal bad experiences as reasons for walking away. Legal challenges also surfaced, with 43% of hesitant buyers pointing to paperwork issues, 22% citing registration transfer delays and 11% expressing concern over unfavourable digital reviews.
Despite skepticism surrounding organised pre-owned vehicle platforms, traditional local dealers continue to command significant trust. Around 73% of first-time buyers reported feeling more comfortable dealing with neighbourhood car sellers, attributing this preference to face-to-face interactions, direct negotiations and a perception of greater transparency.
However, underlying structural issues in the used car ecosystem persist. Legal ambiguities, disputes over documentation, incomplete ownership transfers and fraudulent listings remain key obstacles. Industry experts and consumers alike are calling for clearer regulations, better oversight and simplified processes to instil greater confidence in the used vehicle market.
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