The sales volume of used cars is expected to grow 8 to 10 per cent in the 2025-26 fiscal, according to a report by Crisil Ratings.

Driven by rising digital adoption and better access to finance, the sales volume is likely to touch around six million units this fiscal, it said.

The ratio of used-to-new cars in sales has increased to 1.4 from less than one in a span of five years, the report said.

The market value of used cars is estimated to be around Rs 4 lakh crore.

The organised players in the segment have been incurring high operational cost towards refurbishment, logistics and financing as the sector is in an expansion mode, resulting in cash losses, it said.

However, strong revenue growth is expected to drive breakeven at the operating profit level this fiscal and the next financial year, according to the report.

Until then, the credit profiles of the players will largely depend on timely fund raising and sustenance of adequate liquidity to support growth, Crisil Ratings said.

The segment, which saw volumes staying stable during the pandemic and semiconductor shortage that disrupted production, is expected to remain resilient.

The organised players have collectively raised Rs 14,000 crore through the equity route since the 2018-19 fiscal, the report added.

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