Average selling price of used cars falls first time in five years: Report

Change in emission norms dragged impacted demand, leading to price drop

The average selling price (ASP) of used cars and scooters dropped in 2020 from a year ago even as prices for motorbikes and luxury cars rose during the period, according to Droom’s Automobile Trend Report for pre-owned vehicles.

Based on a sample of over 1.1 billion visitors, 20,000 auto dealers in 1,086 cities and three million listings, the report shows that ASP of used cars in the mass segment fell to Rs 8,38,827 from Rs 9,16,831 in 2019. This is first fall in ASP of cars since 2015. Fuelled by the demand for used cars, prices had been rising steadily year-on-year the past five years. Droom, a marketplace platform, claims to have 315,000 sold vehicles and $3.1 billion in sold GMV (gross merchandise value)

 

Akshay Singh, Chief Strategy Officer, Droom attributes the fall in prices to the transition from BSIV to BSVI emission norms. “There was a decline in demand for pre-owned vehicles with older emission technology, leading to drop in prices,” said Singh. The latter half of the year saw lot of demand and very little supply due to Covid-19, he added.

Meanwhile, the ASP for pre-owned luxury cars rose to Rs 38,09,908 in 2020 from Rs 35,80,265 in 2019. Though the increase is way below the peak of 2016 when prices had touched Rs 1.12 crore, it indicates luxury car owners were holding on to their vehicles longer even as there was enough demand as people preferred a used car instead of a new one in a year of economic distress. This in turn created a demand-supply mismatch leading to a moderate rise in prices, says Singh.

Scooter is yet another category whose prices fell—from Rs 29,249 to Rs 28,819. The drop for the second straight year came as buyers preferred shifting back from scooters to motorcycles, mirroring the trend in the market for new scooters and motorcycles. Indicating a strong demand, prices of used motorcycles rose to Rs 47,869 in 2020 from Rs 42,383 in 2019.