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Consumer Preferences Driving Global SUV Used Car Demand
Percepted Safety, Spaciness, and Versatility as Key Purchasing Reasons
With versatility as a priority, shoppers look for practical features before purchasing a suv used car. Modern families and outdoor enthusiasts appreciate flexible cargo that can hold more than three rows of seating and tow more than 3,500 lbs. Drivers' concern for road visibility is correlated to their perceived safety due to SUV's advantage of a higher driving position. 68% of buyers believe the features mentioned contribute to their sense of safety. Three practical strengths support the purchase of an SUV.
Versatility with the ability of storage that can be flat to fit gear or luggage
Safety features that monitor blind spots
Confidence in any climate is assured with the use of an AWD system
In 2023, the demand for utility vehicles as the first cars for the newly registered was reinforced with a global total of 57.3% due to Experian's study.
Higher Seating Position and Lifestyle Integration in Urban and Suburban Markets
For SUV drivers in urban and suburban markets, the higher seating position improves their driving experience. SUV's commanding driving position increases situational awareness and improves the detection of hazards. SUV's performance is especially appreciated in inclement weather. SUV's use integrates their lives in various aspects. For example, the higher seating position allows for various recreation activities to be supported and shifting between these activities is supported through systems such as parking sensors and rearview cameras which are standard on even larger SUVs.
For these reasons and the use of compact SUVs in urban markets, SUVs resale volumes outspace other sedans by 22% globally.
Market Performance: SUV Used Car Growth and Segment Dominance
Projected $10.1 Billion Market by 2030 Reflects Structural Shift
By 2030, the global SUV used car market is set to reach $10.1 billion and is growing at a 5.8% compound annual growth rate (CAGR), while the overall used car market is growing at 4.3%. This growth reflects a structural shift in the market, with SUVs currently making up 38% of the used car market. Since 2020, new SUV pricing has increased by 22%, leading to increased demand in the pre-owned SUV market. SUVs’ higher resale value (+ 18% than premium hatchbacks) supports SUVs’ status as a financial investment.
SUV Used Car Resale Volume Outpacing Sedans and Hatchbacks Worldwide
SUV used cars are by far the most prominent world used car segment, outpacing sedans and hatchbacks. Globally and in North America, the effect is even more pronounced, with SUVs making up over 70% of used car market transactions in most regions. SUVs have outpaced the market in vertical used car segment growth due to their well established reputation as value retaining, and their unique ability to serve customer demand as a personal vehicle, a family vehicle, and even a recreational vehicle.
Economic Forces Supporting Increased Adoption of Used SUVs
Price of New SUVs, Affordability, and Ownership Costs Crowd Buyers to Used SUVs
Affordable new SUVs have become an increasingly scarce commodity. The average transaction price exceeds $40,000, and buyers also find ownership costs are significantly greater than just the price of the vehicle, due to:
- New SUVs and their advanced driver-assist technologies cost significantly more to insure and register.
- Costs of new vehicle loans are also soaring, thanks to rapidly increasing interest rates.
For budget-conscious new vehicle shoppers, Certified Pre-Owned (CPO) SUVs maximize cost savings. Given the current climate of global inflation, pre-owned vehicles also significantly favor budget-conscious buyers. Buyers continue to look for SUV alternatives to new vehicles that are affordable.
Better Trust: The Impact of CPO Programs on SUV Consumer Confidence.
A CPO Program for Certified Pre-Ownership Provides Quality Control, a Warranty, and Confidence.
In the used SUV industry, Certified Pre-Owned (CPO) programs offer manufactured accountability, warranty confidence, and that a vehicle has fully passed a quality control test of the used SUV industry. Pre-owned vehicle quality control testing has standardized the evaluation of vehicle components such as safety issues and their structural integrity. Buyers also find that Used SUVs CPO Programs sell for 10-15% greater resale premiums than Uncertificallied (unapproved by the country’s governing body or society) used SUVs, which proves the quality of a new used vehicle. In addition to used vehicle CPO Programs that offer warranties, buyers of used vehicles are also being offered warranty confidence gear for major mechanical components, including the drive train (and) outboard of the drive train components warranty. The use of digital mechanical confidence gear is proving to be the ultimate in confidence for components, and has also shown the greatest confidence in the used components. In the used vehicle industry today, confidence is being extended beyond five year.
FAQ
Why are SUVs so popular in the second-hand market?
They are popular due to spaciousness, flexibility, and safety features all thanks to the elevated seating position. This makes them ideal for families and adventure lovers.
How does the SUV second-hand market compare to hatchbacks and sedans?
SUVs are in higher demand due to a perceived higher value, and a bigger alignment with active and adventurous lifestyles.
Why is demand for second-hand SUVs so prevalent?
The cost of owning an SUV has many buyers considering second hand SUVs as they are so much more affordable while still offering the same value.
How do Certified Pre-Owned (CPO) programs benefit SUV buyers?
The benefit of CPO programs for buyers includes a longer warranty, inspections, and a complete vehicle history giving piece of mind and trust for the buyer as well as the resale value.