India’s pre-owned car market is steadily shedding its image as a fallback option and emerging as a structured, intent-driven segment, according to the latest Gears of Growth: The 2025 Indian Used Car Market Report by Cars24.

The report shows that monthly sales contribution remained consistent at 6–10% throughout the year, indicating a shift away from festive-led spikes toward planned purchases. Digital research is now central to the buying journey, with over 1.7 lakh searches recorded for Pre-Delivery Inspection (PDI) in 2025—signalling rising consumer focus on transparency and vehicle quality.

AI is playing a pivotal role in this evolution. AI-led searches rose 6.7 times year-on-year, while searches related to buying cars grew 7.2 times. New car searches increased 8.1 times, and compliance-related searches such as challans jumped ninefold, reflecting growing trust in tech-enabled decision tools.

Tier-2 markets and hatches drive the growth story

The market’s growth is increasingly decentralised. Maharashtra leads with a 20.1% share, while Karnataka’s contribution rose from 10% to 16% and Gujarat’s from 8.7% to 13.1%. In contrast, Delhi’s share declined sharply from 13.8% to 5.8%.

Tier-2 cities now account for 62% of used car purchases, underscoring rising purchasing power and aspiration in non-metro India.

Affordability continues to shape buyer preferences. Hatchbacks command a 52% share of total sales, while SUVs have grown to 32%, signalling aspirational upgrades within defined budgets. Sedans have slipped to 16%.

Among individual models, the Maruti Suzuki Baleno leads with a 15.5% share, followed by the Hyundai Grand i10 at 13.2% and the Renault Kwid at 11.3%.

Financing expands access to ownership

The average selling price stood at ₹5.47 lakh in 2025, reinforcing the segment’s value proposition. Petrol vehicles dominated with an 84.5% share, while manual transmissions accounted for 72% of sales.

Financing is increasingly critical, with 52% of buyers opting for loans and the average EMI at approximately ₹11,400 per month. Adoption is even higher in non-metro markets, supported by digital lending channels and faster credit approvals.

Drawing on internal data from over 33 million users, the report underscores a structural shift: used cars in India are no longer a compromise, but a calculated first choice driven by affordability, data-backed decisions and broader geographic participation.