What is causing the surge in the used car market lately? Numerous factors drive people to consider used cars, such as their lower depreciation and registration costs. However, the primary allure that draws customers towards used cars is their price. The key motivation for buyers is typically owning a vehicle of better quality at a more affordable cost. Despite the demand for new cars, many consumers are currently gravitating towards used cars due to their appealing pricing.
Car manufacturers are adopting a new approach by using AI to disclose car prices. This strategy, known as smart pricing, utilizes artificial intelligence to reveal prices based on the overall market value. Maintaining prices at a more competitive level naturally attracts buyers' attention. The pandemic's preference for more economical transportation solutions has significantly boosted the online used car market, leading to a 17-18% increase in FY21, according to Deloitte. The volume of used cars in the industry surged to 3.9 million units in FY21 from 1.4 million in FY20, as per the Indian Blue Book.
The focus here is on understanding how smart pricing sustains and standardizes the used car market. Instant access has become a cornerstone in the shift toward digital marketing strategies. The online used car business emphasizes instant processes, such as paperless transactions, rapid loan approvals, and swift price evaluations.
Customers favor immediacy, and offering instant services becomes a compelling draw for businesses. Investing in a used car offers the advantage of driving it home without a prolonged waiting period. AI-driven instant pricing estimations further aid companies in showcasing products tailored to individual customers.
Many companies have experienced substantial growth by integrating instant features like video KYC, home inspections, and immediate credit approvals. This instant approach, coupled with additional services like buyback options and warranties, enhances customer trust. However, despite the demand surge, a lack of sufficient working capital remains a challenge for many automotive businesses.
Anticipating the continued rise in demand for used cars, companies are innovating to support dealers and make the market more enticing. Services like vehicle loans for customers and financial aid for channel partners are being introduced. It was predicted that the pre-owned car market might double the size of the new car market by 2024 due to the increased number of refurbished models and OEMs entering the ecosystem.
Companies like Droom Technology are employing AI to facilitate online sales of both new and used vehicles, predicting prices rapidly and accurately. These tech-powered used car startups are even eyeing opportunities in international markets with similar pricing transparency issues.
In essence, maintaining transparent car prices is a prudent move, and the effective utilization of AI plays a pivotal role. Platforms like Kuwy assist in finding car prices and assessing car health instantly, eliminating paperwork hassles for customers and enabling them to drive their chosen car home seamlessly.