How technology driven platforms can aid in increasing business for Certified Used Cars!

 The global used car market is expected to grow at a compound annual growth rate (CAGR) of 6.1% from 2022 to 2030. With the rise of e-commerce and technology, customers are now looking for transparency and trust in the used car buying process. Certified used cars, which are pre-owned vehicles that have undergone a comprehensive inspection and reconditioning process, offer customers the peace of mind they need when purchasing a used car. In this article, we will explore how technology-driven platforms can aid in increasing business for certified used cars.

Certified Used Cars - Definition and Trend

Certified used cars are pre-owned vehicles that have been inspected, reconditioned, and certified by an Original Equipment Manufacturer (OEM). The certification process ensures that the vehicle meets specific quality standards set by the OEM. Only OEM backed New Car Dealers (NCDs) can certify their brand cars, which helps in maintaining the value and reliability of the brand.

The trend of buying certified cars has been increasing globally. Customers are willing to pay a premium for certified used cars due to the added value and peace of mind that come with it. In the US, certified pre-owned (CPO) sales maintained steady position, with over 2.47 million units sold. In India, the organized used car market share is expected to increase from 20% in FY2021-2022 to 45% in FY2026-27 – an estimated 4.4 million units of used cars were sold in FY2021-2022.

Aggregation Woes for OEM NCDs

OEM NCDs face aggregation woes in the used car business. They have limited access to used car inventory, which makes it difficult for them to increase their certified used car business. In contrast, local used car dealers have a higher inventory of used cars, making it easier for them to increase their business.

Untapped Potential in Tier 2 and 3 Towns

There is untapped potential for OEM NCDs in tier 2 and 3 towns. Non-metros account for 65% of used car demand and a CAGR of 30%, which is three times to that of metros. Customers in these towns have limited access to certified used cars and are forced to rely on local used car dealers, which may not offer the same level of quality and reliability as OEM backed NCDs. NCDs with Certified Used car programs have access to real estate, genuine cars and accessories, ancillary services, and quality salesmen, which gives them a competitive advantage over local used car dealers.

Creating a Distribution System

To increase business for certified used cars, it is crucial to create a democratic distribution system accessible to all, that helps brands access their own brand used car inventory. Technology-driven platforms like SheerDrive can help resolve aggregation woes for NCDs by aggregating their used car inventory on a single platform. This allows NCDs to access a larger customer base and increase their business.

Unique Algorithm for Pricing

SheerDrive uses a unique algorithm that factors in various standard repair and refurbishment costs for brands to arrive at the right price. This ensures that dealers are not stuck with inventory and that buyers are able to buy cars at the right price. The remarketing benefits from SheerDrive's app help dealers get desired brand cars as used car inventory, increasing their business and improving their bottom line.

Conclusion

Certified used cars offer customers the peace of mind they need when purchasing a used car. OEM backed NCDs face aggregation woes in the used car market, which makes it difficult for them to increase their certified used car business. Technology-driven platforms like SheerDrive can help resolve aggregation woes for NCDs by aggregating their used car inventory on a single platform. This allows NCDs to access a larger customer base and increase their business. The untapped potential in tier 2 and 3 towns for NCDs provides an opportunity for them to increase their business and improve their bottom line.

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