Cars24, a leading AutoTech company in India, has released its DriveTime Quarterly report for Quarter III, 2024, revealing notable trends in car buying during the recent festive season. The report highlights a surge in car sales, with safety emerging as a primary concern for buyers, influencing their purchasing decisions and driving a preference for pre-owned vehicles that offer a balance of affordability and advanced safety features. This shift in consumer behavior is reflected in increased spending on value-added services like extended warranties and safety upgrades, indicating a desire for a comprehensive car ownership experience.

Car sales trend this festive season

This festive season witnessed a significant increase in car sales, with Indians purchasing an average of three cars every hour on the Cars24 platform. Buyers spent approximately four hours researching on the platform before making a purchase. The transition from Shradh to Navratri marked a substantial surge in sales, with car deliveries on the first day of Navratri quadrupling the normal average. Customers benefited from significant discounts during this period, collectively saving over INR 10 crores in a single month.

“This festive season, cars are no longer just about getting from one place to another. They’re about creating memories and new beginnings. It’s heartwarming to see families choose cars as a way to bring freedom, comfort, and shared moments into their lives. Because, at the end of the day, better drives lead to better lives—and that’s what these cars represent,” stated the company.

Peak time for auto sales

Key festivals like Independence Day and Ganesh Chaturthi saw substantial sales, with cars worth INR 5.5 crore finding new owners each day. In Mumbai, Ganesh Chaturthi spurred a significant portion of these sales, with 16% of cars sold during the festival. While Diwali traditionally sees the highest car sales, this year, Raksha Bandhan and Bhai Dooj witnessed comparable sales figures, indicating a broader trend of associating car purchases with significant festivals.

Interestingly, Bengaluru led in car sales during Diwali, and Karwa Chauth saw a 42% increase in sales compared to Bhai Dooj, with men opting to gift their wives cars, reflecting a shift towards practical and experience-oriented gifting.

Safety, a key element while purchasing a car

The report reveals a growing emphasis on safety in car buying decisions in India. Over 70% of car buyers prioritize safety, with 58% willing to pay a premium for enhanced safety features. This trend is attributed to increasing safety awareness and stricter regulations mandating features like six airbags, Electronic Stability Program (ESP), and ISOFIX child seat anchors.

Furthermore, 28% of car owners expressed intentions to upgrade from vehicles with low safety ratings, and 91% believe that incentivizing safer cars is crucial. The increasing investment in value-added services (VAS) like extended warranties and technology upgrades, with buyers spending over INR 10,000 on average, signifies a preference for cars that offer both utility and a sense of luxury.

Features

The demand for security features is evident in the 12% of buyers opting for dashcams and 45% choosing Roadside Assistance. Features once considered optional, such as sunroofs, GPS navigation, rearview cameras, and leather interiors, are now becoming standard expectations, underscoring a shift towards a holistic car ownership experience that combines peace of mind with elevated lifestyle and convenience.

Silver emerged as the most popular car color, while hatchbacks like the Maruti Suzuki Swift and Baleno remained favored for their compact size and versatility. The average festive season spend on cars was INR 5.8 lakhs.

Pre-owned car sales trend

Tier II and III cities experienced a surge in pre-owned car sales, with Trivandrum witnessing a 45% increase and Mysore a 20% rise. This trend reflects the growing preference for affordable yet stylish pre-owned vehicles in these regions. Cars like the Hyundai Grand i10, Maruti Suzuki Baleno, Renault Kwid, Hyundai Elite i20, and Tata Tiago were popular choices in non-metro markets due to their fuel efficiency, compact size, and affordable maintenance.

Tier II cities like Lucknow, Jaipur, Rajkot, and Agra followed suit, embracing the value proposition of pre-owned cars. Metro cities, including Delhi, Mumbai, Bengaluru, Pune, and Hyderabad, also saw similar trends, indicating growing trust in the pre-owned car market. Buyers now view these vehicles as not only cost-effective but also as smart and sustainable options.

ASP of used-cars

The Average Selling Price (ASP) of used cars has seen an 85% increase in recent years, attributed to rising incomes and the desirability of premium features. Entry-level cars priced around INR 4 lakhs are being replaced by pre-owned vehicles offering superior features and value. This trend highlights the increasing disposable income and the perception of greater value for money offered by pre-owned cars.

The Cars24 platform facilitated transactions worth INR 800 crores during this quarter, with an average of four cars sold every hour. The platform's hassle-free, fully online process has made it increasingly convenient for users to sell their cars.

SUVs to continue its momentum

SUVs are gaining traction among Indian car buyers, with compact models like the Tata Nexon leading the way. SUV sales surged by 15% quarter-on-quarter, now accounting for 20% of total car sales. Popular SUV choices include the Hyundai Creta, Ford EcoSport, MG Hector, Nissan Magnite, and Tata Safari, reflecting a preference for robust and spacious vehicles.

While hatchbacks remain popular, preferences are evolving. The Hyundai Grand i10 and Maruti Suzuki Baleno have surpassed the Maruti Suzuki Swift as top sellers in 2024, while Maruti Suzuki's market share decreased from 41% in 2022 to 33% in 2024. Sedans are also experiencing a resurgence, representing 21.2% of the market, with Hyundai holding a 26% share and Honda 10%. Despite the rise of SUVs, hatchbacks and sedans continue to offer practicality and affordability.

Fuel choices

Petrol remains the preferred fuel choice, with 85% of buyers opting for petrol-powered vehicles. Factors like convenience, cost-effectiveness, familiarity, and availability continue to influence fuel preferences. Petrol cars are often perceived as having lower maintenance costs, making them a budget-friendly option. Delhi-NCR witnessed the highest sales of petrol vehicles. While diesel retains some popularity in cities like Bengaluru and Hyderabad, its overall sales have declined.

Car financing is playing a significant role in shaping car ownership trends in India, with Cars24 disbursing INR 300 crores worth of car loans this quarter. The average age of car buyers has decreased from the mid-40s to the early 30s, with millennials driving this trend.

Auto financing

Women have emerged as significant contributors to the car financing landscape, securing 19% of loans, indicating their growing financial independence and evolving societal roles. Women are also experiencing faster loan approvals and consistently repaying their EMIs, marking a shift towards independent mobility.

Cars24 processed over 400 loan applications daily this quarter, with the highest loan amount reaching INR 14 lakhs for models like the Tata Harrier. Smaller loans, such as INR 1 lakh for the Maruti Suzuki Alto K10, highlight the accessibility of car financing across segments. Notably, 20% of customers opted for zero down payment options.

Tier II and III cities witnessed significant loan demand, with Ahmedabad, Jaipur, and Bhopal leading in disbursements. The Hyundai Grand i10 and Maruti Suzuki Baleno remained the most popular choices among loan takers, with an average EMI of around INR 12,000 at a 15% interest rate. This quarter reflects a significant shift towards accessible car ownership, with loans making mobility a reality for many and offering greater options, flexibility, and empowerment.

Cars24, currently operational in over 200 cities across India, is committed to making car ownership affordable and accessible to all.