(MENAFN- IANS) Mumbai, July 11 (IANS) India's used-car market is growing rapidly and is expected to cross 6 million units this fiscal, driven by rising demand among value-conscious buyers, increasing digital adoption and easier access to financing, a new report said on Friday.

The sales volume of used cars is growing at a pace of 8–10 per cent, which is more than twice the growth rate of new car sales, according to data compiled by Crisil Ratings.

This surge has pushed the used-to-new car sales ratio to 1.4 this year, up from less than 1 five years ago, signalling a major shift in consumer behaviour.

The estimated market value of used cars now stands at around Rs 4 lakh crore -- nearly matching the value of new car sales in the country, the report stated.

Anuj Sethi, Senior Director at Crisil Ratings, said that the rising used-to-new car ratio indicates a long-term shift in buyer preferences.

He added that the average age of used cars is now dropping, expected to reach around 3.7 years, which shows that people are upgrading their vehicles more quickly, especially with a growing preference for utility vehicles.

One of the main reasons behind this shift is that more people are now confident in buying used cars due to digital platforms offering better transparency and convenience.

Also, with new car deliveries facing delays because of global shortages -- including Rare Earth magnets and semiconductors -- many buyers are turning to pre-owned vehicles for quicker access.

Crisil's analysis of six key online used-car platforms -- including those backed by manufacturers -- shows that these companies, which together make up about half of the organised used-car market, are expanding rapidly.

These platforms account for nearly one-third of the total used car sales in India, as per the report.

The report noted that India's used-car market still has significant room to grow. Another factor supporting the growth of used car sales is the increasing availability of financing.

Many platforms have partnered with lenders and are using Artificial Intelligence to assess and underwrite loans more effectively, making it easier for buyers -- especially first-time car owners -- to afford pre-owned vehicles.

Poonam Upadhyay, Director at Crisil Ratings, noted that while margins remain under pressure due to high costs, the trend of offering integrated services such as inspection, doorstep delivery, insurance, and financing will help players improve their bottom line over time.

“With tighter cost controls and continued demand, most companies in the space are expected to become profitable at the operating level soon,” Upadhyay noted.

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