Used car sales: Crisil sees 8–10% volume growth in FY26; digital shift and finance access boost outlook

India’s used car market is set to expand by 8–10% in FY26, with total sales expected to touch nearly six million units, according to a new report by Crisil Ratings. The firm attributed the growth to rising digital adoption and easier access to vehicle financing.

The used-to-new car sales ratio has climbed to 1.4 over the past five years, from below one earlier, highlighting a steady shift in consumer preference, the report noted, PTI reported.

Crisil estimated the value of the used car market at approximately Rs 4 lakh crore.

While demand momentum remains strong, organised players are grappling with high operating costs linked to vehicle refurbishment, logistics and financing. These factors, combined with expansion-related spending, have led to continued cash losses across the sector.

Crisil expects this trend to reverse as revenues grow, saying that players are likely to achieve operating breakeven during the current and next fiscal years. “Strong revenue growth is expected to drive breakeven at the operating profit level this fiscal and the next financial year,” the report said.

However, Crisil cautioned that the financial health of players will depend on sustained liquidity and successful fund-raising initiatives to fuel expansion. So far, organised firms have raised Rs 14,000 crore via equity since FY19, it added.

Despite recent disruptions — from the COVID-19 pandemic to chip shortages that affected new car supply — the used car segment remained stable and is expected to stay resilient, the agency said.