Why are more Indians buying used SUVs? New auto report reveals REAL reason

The demand for SUVs and compact SUVs is a major factor behind the rapid growth of the pre-owned car market, a recent report said.

The used-car market, which reached 5.9 million units in FY 24-25, is projected to grow at a 10 per cent Compound Annual Growth Rate (CAGR), to reach 9.5 million units by 2030, as per the seventh edition of the Indian Blue Book, co-authored by car&bike, Mahindra First Choice, and Volkswagen Pre-owned Certified.

According to the report, SUVs and compact SUVs now capture more than 50 per cent of the used-car market, up from 23 per cent just four years ago.

Average selling prices (of used cars) have risen sharply by 36 per cent over the same period, while non-metro buyers (68 per cent) have emerged as the fastest-growing spending force in this sector.

The recent reduction in Goods and Services Tax (GST) rates on the automobile industry, which boosted sales during the late-2025 festive period, also plays into these trends.

The revised GST slabs boost pre-owned car sales because a reduction in the GST rates of new cars will have a corresponding reduction effect on used-car pricing, not to mention the fact that it stabilises the used-car ecosystem in general.

Amid this shift, strong brand loyalty has also been observed in consumers, with 42 per cent willing to buy the same brand again. 

Cars with higher residual value or build quality also see longer ownership periods and continued aftermarket demand, the report said, citing Volkswagen, Skoda and Honda as three key brands leading in this aspect.

This also points to a larger trend of upgrading to newer, safer pre-owned cars, as buyers increasingly value quality, safety ratings, and detailed technical specifications.

This reflects a shift towards premiumisation and consolidation, also reflected in how a number of consumers moved upwards—from hatchbacks to compact SUVs/sedans, and from compact SUVs/sedans to full-size SUVs.

"Indian consumers today are more informed and discerning; they seek vehicles that offer proven safety, reliability, and performance," noted Nitin Kohli, Brand Director, Volkswagen India.

"For the first time, used cars in India are driving aspiration, not just affordability ... As organised platforms raise the bar for trust and service, we’re seeing a fundamental shift in how the used cars are being bought and sold. The used car is now a choice, not a fallback option," explained Mohammed Turra, MD & CEO, Mahindra First Choice.

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