ONLINE CAR BUYING MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Market Size and Trends

Global online car buying market is estimated to be valued at USD 328.90 Bn in 2024 and is expected to reach USD 751.83 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 12.5% from 2024 to 2031.

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Global online car buying market is witnessing growth as people are shifting towards online medium for their automotive purchase needs. Customers now want the convenience of researching different options, comparing vehicles, and completing the transaction from the comfort of their home, and this drives the market growth. With increasing internet use and a tech-savvy customer base, automotive OEMs and dealers are enhancing their online presence with virtual showrooms and better vehicle listings, offering seamless online purchase journeys that attract more customers. This shift in purchase preference towards online medium is expected to continue in the near future and drive the market growth.

Market Driver: Emergence of Advanced Online Tools

Global online car buying market has witnessed significant growth in the recent years due to emergence of various advanced online tools that have enhanced the digital car buying experience for consumers. Several car manufacturers and dealers have developed sophisticated virtual and augmented reality configurations that allow customers to visualize different car models, interior designs, colors and customization options from the comfort of their homes. This has addressed the limitations of traditional methods which involved physically visiting multiple showrooms. The advanced Virtual Reality and Augmented Reality simulations powered by Internet of Things and machine learning effectively emulate the real feel of test driving and sitting inside vehicles. This immersive digital experience has gained popularity especially among the younger demographic who prefer online research before engaging in sales conversations.

Furthermore, many online platforms now provide self-service options through which detailed vehicle history reports, auto loan pre-approvals, trade-in appraisals, total cost of ownership calculations, and other scan be accessed independently by customers at any time of their convenience. This empowering of consumers with useful online tools has addressed the asymmetry of information that previously existed due to limited assistance from sales representatives. The availability of comprehensive vehicle analytics right from the preliminary stages of research has substantially improved transparency and rational decision making in the car buying process. It allows potential buyers to compare multiple makes and models on objective parameters and qualify their shortlist well before engaging with dealers. Several online configuration tools also enable customers to build their dream car from scratch with desired features and exactly calculate the online price instantly.

Market Concentration and Competitive Landscape

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Global online car buying market has evolved significantly beyond standalone online and offline channels with the rise of effective multichannel integration models. Nowadays consumers conduct an initial online research across multiple touchpoints but prefer engaging with dealerships or multibrand sales consultants for test drives, paperwork, loan processing and delivery of their new vehicle. Recognizing this omnichannel behavior, leading automotive retailers have incorporated synchronous digital and physical shopping journeys. For example, some allow customers to complete most of the paperwork, trade-in valuations and financing online before scheduling a brief visit to the dealership only for the final negotiations, signing of contracts and vehicle handover.

Many dealerships have also established dedicated mobile sales consultants who can demonstrate vehicles, resolve queries and coordinate deliveries remotely for customers who want a personalized touchpoint near their location without having to visit crowded showrooms. 

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One of the major challenges faced by online car buying market is the lack of personal interaction. Many customers still prefer to physically inspect vehicles and negotiate prices in person before purchasing the vehicle. It can be difficult to build trust and convince customers of value through an impersonal online process. The companies need to address customers' concerns about the ownership transition, such as registering the vehicle and arranging trade-ins or financing, without live support.

Market Opportunity: Growth of used car selling online

As younger generations accustomed to e-commerce gain purchasing power, digital solutions will become more accepted. With technology that provides high-quality virtual tours, online negotiation tools, and streamlined paperwork, companies can remove friction from many steps of the process. By offering competitive prices upfront and a simple buying experience from anywhere, online retailers have a chance to attract customers valuing convenience over interaction. 

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In terms of vehicle type, SUV segment is estimated to contribute the highest share of the market owing 35.4% in 2024 due to convenience and family oriented needs of customers. SUVs offer superior seating capacity, substantial boot space, and commanding driving position that makes them a practical choice for families. Their versatile interior layouts with flexible seating arrangements come handy for accommodating additional passengers or cargo. The elevated driving position of SUVs allows better visibility of road that makes them suitable for city commutes as well as highway rides. Moreover, SUVs have robust built quality and feel secure in case of an accident due to their imposing size. Their superior ground clearance also enables better navigation of flooded roads and uneven terrains. Many modern SUVs now come equipped with latest connectivity features and advanced safety systems which add to their allure. Their easy loading-unloading function due to rear hatches cater well to the needs of nuclear families. 

Insights, By Propulsion Type- Dependence on gasoline drives petrol's dominance

In terms of propulsion type, petrol segment is estimated to contribute the highest share of the market owing 45.5% in 2024 due to widespread preference for gasoline powered vehicles. Vast infrastructure and ready availability of petrol fuel stations across the nation facilitate petrol cars. Many petrol variants provide smooth drivability and quicker acceleration due to less mechanical complexity of gasoline engines. Also, majority of automakers offer more style and performance oriented trims in petrol drivetrains. Although petrol vehicles have lower range per tank as compared to diesel counterparts, their simple technology and minimal maintenance requirements make up for that limitation. Despite being marginally expensive than diesel, petrol continues to attract buyers by virtue of hassle-free refueling experience.

Insights, By Category- Economic benefits fuel pre-owned market demand

In terms of category, pre-owned vehicle segment is estimated to contribute the highest share of the market owing 67.4% in 2024 due to tangible economic benefits offered. Given relatively lower price tags of used cars, these remain the most cost effective mobility solution for family buyers seeking best value. Pre-owned inventory enable first time buyers to own prestigious brands without breaking banks. Many well-maintained new cars deliver performance at par with new ones at nearly half prices. Moreover, pre-owned options offer hassle-free funding options like easy loan approvals against lower down payments. Certified pre-owned vehicles also assure quality control and warranty coverage, thus, providing an assurance to buyers. Going for slightly older models allows circumventing rapid initial depreciation of brand new cars providing tangible savings.

Regional Insights

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The North America has emerged as the dominant in online car buying market owing 39.4% in 2024. With the largest economy in the world and increasing digital penetration, the U.S. provides automakers a huge potential customer base that can be tapped into online. American consumers have readily embraced the convenience of shopping from home and several automotive brands have established a strong direct-to-consumer online sales presence in the country. The widespread availability of high-speed internet across urban and many rural regions facilitates the online research and purchase process for car buyers. Automakers benefit from centralized inventory and sales data that allows for efficient pricing, promotions and delivery across the vast American landmass. States like California and Texas that have very large vehicle markets are especially attractive for automakers to push online sales.

A region that is exhibiting rapid growth in online car buying market is Western Europe. With countries like the U.K., Germany, France and others having developed digital infrastructure and highly connected populations, the market potential is immense. However, the online purchase rates are still lower than the US. Automakers are ramping up their digital initiatives and investments in this region. For example, some are launching virtual showrooms and augmented reality configurators to provide an engaging online shopping experience for European customers. Cross-border sales within the European Union has also increased as language barriers reduce with online purchases becoming commonplace across national boundaries. Strong brand loyalty for German luxury marques coupled with rising disposable incomes makes several Western European nations an emerging hotspot for online car sales.

Market Report Scope

Key Developments

• On November 7, 2023, CarGurus Inc. is a leading online automotive marketplace headquartered in Cambridge, Massachusetts. announced its acquisition of CarOffer, thus, aiming to expand its presence in the automotive market. CarOffer specializes in innovative technology solutions for vehicle buying and selling, thus, aligning with CarGurus' growth strategy.
• On November 15, 2022, AutoNation Inc. is a prominent automotive retailer in the United States, headquartered in Fort Lauderdale, Florida. announced its acquisition of approximately 6.1% of TrueCar, a leading digital marketplace in the automotive sector. TrueCar connects car buyers with Certified Dealers nationwide, thus, reflecting AutoNation's commitment to cutting-edge technologies and exceptional customer service.
• In September 2022, Volvo a leader in safety technology and innovation announced its plan to expand its certified used-car operations in India by early 2024, aiming for this segment to represent about one-third of its total sales volume. Volvo runs its pre-owned car business worldwide using the 'Selekt' platform, which was introduced in India with the opening of two dealerships.
• On December 2, 2020, Asbury Automotive Group Inc. is a prominent automotive retailer in the United States, headquartered in Duluth, Georgia. introduced Clicklane, a complete online car buying and selling platform. Developed in partnership with Gubagoo, Clicklane enhances the car purchasing experience across Asbury's store network.

*Definition: Online car buying platform allows consumers to research, locate, and purchase vehicles entirely through an online marketplace and without having to visit a traditional dealership. Users can search inventory across many dealers, compare vehicles based on features and prices, get financing options, and complete the purchase including signing paperwork digitally. The product streamlines the car buying process from start to finish through an easy-to-use website or mobile app, saving users time while still providing all the functionality of shopping for a new or used car.

Market Segmentation

• Vehicle Type Insights (Revenue, USD BN, 2019 - 2031)
• • Hatchback
  • Sedan
  • SUV
  • Others
•  Propulsion Type Insights (Revenue, USD BN, 2019 - 2031)
  • Petrol
  • Diesel
  • Others
•  Category Insights (Revenue, USD BN, 2019 - 2031)
  • Pre-Owned Vehicle
  • New Vehicle
• Regional Insights (Revenue, USD BN, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • South Africa
    • Rest of Middle East & Africa
• Key Players
  • American City Business Journals Inc.
  • Asbury Automotive Group Inc.
  • AutoNation Inc.
  • CarGurus Inc.
  • CarMax Inc.
  • Cars and Bids LLC
  • Cars.com Inc.
  • Cars24 Services Pvt. Ltd.
  • CarSoup of Minnesota Inc.
  • Carvago
  • Carvana Co.
  • Cox Enterprises Inc.
  • eBay Inc.
  • Edmunds.com Inc.
  • Hendrick Automotive Group
  • Lithia Motors Inc.
  • MH Sub I LLC
  • Miami Lakes Automall
  • TrueCar Inc.