The global online car buying market value reached around USD 334.10 Billion in 2023. The rise in the number of active internet users globally has facilitated the growth of the online car buying market. As more people gain access to the internet, they are increasingly turning to digital platforms for vehicle research and purchases. The industry is expected to grow at a CAGR of 11.90% during the forecast period of 2024-2032 to attain a value of USD 919.07 Billion by 2032. The surge in interest around electric vehicles is also contributing to market growth. Online platforms have been proactive in promoting EVs by highlighting their environmental benefits and cost savings.
Base Year
Historical Year
Forecast Year
Value in USD Billion
2024-2032
Online Car Buying Market Outlook
*this image is indicative*
Online car buying refers to a car buying process in which the internet along with a well-connected device is used to facilitate various steps of the car buying process. These steps include car selection, rate comparison, analysis of features, and finally initiating the transaction. The ongoing transition from traditional to online modes of car buying for more personalised experiences is driving growth of the online car buying market. As per industry reports, the most popular online activities for car shoppers include searching for car prices (71%), finding actual cars for sale (68%), and comparing different models (64%). Moreover, availability of high-speed internet, growing adoption of tablets and laptops, and increasing investments towards online brand advertising are attracting a greater number of online car buyers every year.
Reports indicate that over 60% of consumers now prefer to shop for cars online rather than visiting dealerships. In response, companies like Nissan Home allows customers to complete purchases, including test drives and financing, entirely online. Moreover, companies are using VR to provide immersive vehicle tours, with studies showing that 30% of consumers are more likely to purchase a vehicle after experiencing a virtual tour. The growing popularity of EVs is also reshaping online sales. Platforms now increasingly feature dedicated sections for EVs, and research indicates that interest in EVs has increased by 50% among online shoppers in recent years. These factors are propelling growth of the market.
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Increase in electric vehicle (EV) sales, rise of digital platforms and marketplaces, and growing demand for certified pre-owned (CPO) vehicles are key trends aiding the market growth.
Another distinct trend is the move towards electric vehicles (EVs) in the online car market due to increasing consumer preference for sustainable vehicles. As per industry reports, online EV sales grew by 25% year-on-year in 2022, outpacing traditional internal combustion engine (ICE) vehicles. Online platforms are actively promoting EVs, aligning with global sustainability goals and highlighting the lower lifetime carbon emissions of these vehicles. For example, in North America, online sales of electric vehicles are growing at a 45% YoY rate, signaling a growing online car buying market value.
The trend of completing car purchases entirely online is gaining momentum. Recent surveys indicate that 30% of car buyers prefer to conduct their entire transaction digitally, up from 16% in 2019. This shift has been accelerated by the pandemic, which forced many dealerships to pivot to online sales. Notably, 70% of consumers express a preference for negotiating prices and finalising deals from home. In 2022 alone, over 1 million vehicles were sold through fully online platforms in the U.S., illustrating the growing acceptance of this mode of purchase.
Specialised online car buying platforms are transforming how consumers purchase vehicles. For example, Carvana reported selling approximately 200,000 vehicles in 2021, a staggering 126% increase year-over-year. Similarly, Vroom has seen its sales grow significantly, with over 80,000 vehicles sold in 2021. A survey found that 61% of U.S. car buyers now prefer an online experience over traditional dealership visits, compared to only 33% in 2018. This shift in online car buying market indicates a growing comfort with digital transactions and a desire for convenience among consumers.
The demand for certified pre-owned vehicles is on the rise due to the ongoing demand for high-quality used vehicles amidst a backdrop of limited supply of newer models. In 2024, CPO sales are expected to reach approximately 2.7 million units, reflecting a 3% increase from the 2.6 million units sold in 2023. The increasing popularity of CPO vehicles can be attributed to their combination of affordability and quality assurance. This trend indicates a strong consumer preference for certified options that offer peace of mind regarding vehicle reliability and condition.
One of the biggest trends influencing online car buying demand forecast is the increasing use of augmented reality (AR) and virtual reality (VR) technologies by car selling platforms. These tools are enhancing the user experience by allowing consumers to take virtual test drives, inspect car interiors in 360-degree views, and visualise different color options. Recent studies suggest that over 30% of online car buyers have leveraged these technologies, indicating a trend that's likely to grow. Moreover, platforms incorporating AR and VR have seen an average 15% increase in sales conversions, further driving online car buying market revenue. Additionally, about 80% of consumers, which translates to roughly 200 million people, use their smartphones for research during the car buying process. This technological integration not only enhances the shopping experience but also helps consumers make more informed decisions.
Changing preference of customers towards avoiding stressful negotiations and extensive browsing, is another key trend in the online car buying market. To cater to this demand, platforms like Carvana and Vroom have transformed the buying experience for consumers by offering extensive vehicle selections and financing options. Availability of financing options have led 71% of customers to finance through the same site they purchase their vehicle, leading to market growth.
The most successful automotive retailers are adopting multichannel strategies, where consumers can search for cars online and complete much of the purchasing process digitally but visit an affiliated local dealer to test drive the vehicle. This trend allows retailers to leverage the convenience and selection of online shopping while still providing the in-person experience that many consumers value when making a significant purchase like a car. Moreover, the rise of third-party online marketplaces enables both professional dealers and private sellers to fuel online car buying demand by making it easier for consumers to compare prices and options without extensive paperwork. According to a recent EY Mobility Consumer Index, 25% of car buyers are now opting to complete their purchases online through manufacturer or third-party websites. However, 61% still prefer to finalise their purchases at dealerships, highlighting need for hybrid approach.
The market is experiencing notable growth; however, several factors are restraining its expansion. A significant challenge is the lack of personal interaction, as many consumers prefer to physically inspect vehicles and negotiate prices in person, which fosters trust and confidence in their purchase decisions. According to a 2022 survey by Cox Automotive, 63% of car buyers still prefer the traditional dealership experience, citing the importance of test-driving and inspecting vehicles before making a purchase. This preference is particularly pronounced in semi-urban and rural areas, where consumer awareness and acceptance of online car buying remain low; many potential buyers in these regions view purchasing a car as a status symbol that necessitates a traditional buying experience.
Additionally, concerns about trust and authenticity in online listings hinder online car buying demand growth. A survey conducted by AutoTrader revealed that 43% of potential buyers worry about the accuracy of vehicle descriptions, fearing misrepresentation or fraud. The inability to conduct physical inspections raises further apprehensions about hidden damages, despite the availability of digital tools like vehicle history reports. Furthermore, a report from Deloitte indicated that 56% of consumers are concerned about the security of their personal and financial information when making online purchases, which has often deterred them from engaging in online transactions.
Moreover, the dominance of unorganised sellers in markets like India and China, where approximately 70% of used car sales occur through informal channels, often leads to vehicles being sold without warranties and under conditions that misrepresent their actual state. This exacerbates consumer fears and limits the market's potential.
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The EMR’s report titled “Global Online Car Buying Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:
Market Breakup by Vehicle Type
Market Breakup by Propulsion Type
Market Breakup by Category
Market Breakup by Region
Market Insights by Vehicle Type
The SUV segment dominate the market as recent data indicates that online sales of SUVs and trucks in North America surpassed 4 million units in 2022 and 2023, accounting for approximately 55% of all online car sales in the region. Consumer prefer purchasing SUVs due to their spaciousness, family-friendly features, and off-road capabilities.
Sedans, while traditionally popular for their fuel efficiency and comfort, have seen a decline in online car buying market share compared to SUVs. However, they still hold a significant position in the online car buying landscape, especially among budget-conscious consumers. The convenience of researching and purchasing sedans online has made this segment appealing, particularly for buyers looking for reliable, cost-effective vehicles.
Hatchbacks are increasingly favoured by urban consumers, particularly in densely populated areas where space is limited. Although hatchbacks represent a smaller share of the market compared to SUVs and sedans, they are gaining traction due to their affordability and practicality. Online platforms often highlight hatchbacks for their value proposition, making them accessible to younger demographics and first-time car buyers.
Market Insights by Propulsion Type
As per the online car buying industry analysis, the petrol segment is projected to hold the largest share of the market. Petrol cars are favored for their affordability, ease of use, and lower initial costs compared to diesel variants. They are particularly well-suited for urban driving conditions, where shorter distances and frequent stops are common. The simplicity of petrol engines, which typically require less maintenance and are quieter than diesel engines. Moreover, the widespread availability of petrol stations enhances the attractiveness of petrol vehicles.
Recent trends indicate a growing preference for petrol cars among younger buyers, who are increasingly inclined to avoid higher purchase prices of diesel vehicles. For example, in India, the government has implemented measures to phase out older diesel vehicles in urban areas due to environmental concerns, further pushing consumers towards petrol vehicles. This shift is reflected in higher sales of petrol variants of Tata Nexon and Hyundai Creta as compared to their diesel counterparts.
Conversely, the diesel segment is expected to grow at a slower rate compared to petrol, but it still appeals to fleet operators and individuals who cover extensive mileage, as they tend to offer lower running costs over time. According to industry reports, diesel engines can provide 20-25% better fuel efficiency than petrol engines, which translates to significant savings for high-mileage users. However, the increasing scrutiny on diesel vehicles due to emissions regulations and potential bans in urban areas poses challenges for this segment in online car buying market outlook.
Market Insights by Category
The new vehicle segment, based on category, is projected to grow at a rapid pace in the market for online car buying over the coming years. Buying a brand-new car comes with numerous benefits such as warranty by the manufacturer, a car without any wear and tear, and well installation of latest technologies and features which enhance customer satisfaction. Growing availability of car loans and rising disposable income across emerging economies are expected to aid the sales of new cars in the forecast period. Purchasing new cars online also reduces the risk of unexpected issues that may arise in used vehicles, and customers have a wider range of new cars to choose from. Recent statistics indicate that new vehicle sales in the U.S. are forecasted to reach approximately 15.7 million units in 2024. Additionally, the average transaction price for new vehicles has stabilised around USD 44,186, down from previous peaks, making new cars more accessible to a broader audience. Moreover, automakers like Nissan have partnered with online marketplaces such as CarGurus to improve sales of new vehicles and online car buying industry revenue.
In contrast, the pre-owned vehicle segment has emerged as the largest and fastest-growing segment in the market due to the increasing demand for affordable and reliable second-hand cars, especially in developing economies like India. The current value of used car sales is estimated at USD 32.44 billion, with projections indicating it could more than double to USD 73 billion by FY28. The rise of certified pre-owned (CPO) programs has also bolstered the pre-owned segment. Approximately 25% of all used cars sold online in 2022 were CPOs, reflecting their growing popularity among cost-conscious buyers. The convenience of online platforms, which allow for easy comparisons and financing options, has further enhanced the appeal of pre-owned vehicles.
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North America Online Car Buying Market Trends
The North American market is projected to grow at a high CAGR due to the increasing adoption of e-commerce and digital payment mechanisms, along with a rise in consumer technological literacy. The pandemic has also accelerated the shift towards online shopping. About 81% of used car buyers in the U.S. research and compare vehicles online before making a purchase. Moreover, a recent survey indicated that one in four car buyers are purchasing vehicles online. However, many consumers still prefer to complete the purchase in a dealership, indicating an upcoming trend of hybrid approach.
Several companies like Vroom and Carvana are leading the charge in the North American online car buying market expansion by launching platforms that allow for comprehensive online transactions, including test drives and financing arrangements. For instance, Nissan introduced Nissan@Home, enabling customers to complete their purchases entirely online.
Asia Pacific Online Car Buying Market Drivers
The Asia Pacific is anticipated to account for a significant share in the market in the forecast period. Growing demand for online car buying across developing economies like India is encouraging dealerships to conduct the entire sales process online, to save time and ease the financing and delivery process. Increasing per capita income, coupled by accelerated digitalisation in this region, is also likely to offer lucrative online car buying market opportunities in the coming years.
Platforms such as Cars24 and Droom are leading the charge in market, with Cars24 reporting a 28.3% increase in online used car transactions in China in 2022, reaching 2.2 million units. However, challenges such as limited awareness in rural areas and trust issues regarding online transactions remain. Governments are also promoting online vehicle sales through incentives, further stimulating market growth in this dynamic region.
Europe Online Car Buying Market Opportunities
The online car buying industry in Europe is experiencing robust growth due to a shift towards digital transactions and dominance of domestic car makers. European consumers exhibit strong brand loyalty, particularly towards domestic manufacturers. German brands like Mercedes-Benz, BMW, and Volkswagen account for nearly 50% of online car sales in the region, further driving market’s growth. Moreover, European region is experiences strong growth in the EV segment as electric vehicles (EVs) make up about 10% of online sales, and hybrid models have seen a remarkable 35% growth. Platforms such as AutoScout24 and Mobile.de are leading the way in the region.
Latin America Online Car Buying Market Growth
The online car buying market in Latin America is evolving, driven by rising vehicle sales. As of 2023, the Latin American automotive industry sold approximately 4.8 million vehicles, with Brazil accounting for an estimated 2.4 million units of the total, marking an 8% growth from the previous year. Mexico follows with around 1.4 million units, showing a remarkable 24.4% increase compared to 2022. The region is also witnessing a higher demand for SUVs. As per industry reports, in 2022, SUVs accounted for 45% of new car sales, up from 35% in 2019. Despite growth, challenges such as high import taxes and a lack of comprehensive post-sale services for online purchases hinder market expansion.
Middle East and Africa Online Car Buying Market Dynamics
The online car buying market in the Middle East and Africa (MEA) is experiencing significant growth, fueled by increasing demand for used vehicles, the rise of digital marketplaces, and changing consumer preferences. Notably, Africa accounts for around 40% of global used vehicle imports (including US, Japan, and EU), with countries like Nigeria and Libya leading the way.
In the UAE, the car market is characterised by a mix of organised and unorganised players, with companies such as Al-Futtaim Group and Dubizzle Motors being the dominant players. Moreover, Abu Dhabi Islamic Bank has launched digital car marketplaces that allow consumers to search for vehicles, schedule test drives, and apply for financing online. Additionally, approximately 25% of consumers in the region prefer online purchases, which has paved the way for online car buying market.
Start-ups in the market are focusing on enhancing consumer convenience and experience through technological advancements. Key areas of innovation include the development of virtual and augmented reality tools that allow customers to visualise vehicles remotely, and the integration of seamless online financing options. Start-ups are also leveraging e-commerce trends to provide comprehensive vehicle information, including history reports and pricing analytics, empowering buyers to make informed decisions. Additionally, they are exploring ancillary revenue streams to maintain profits. Some of the most successful start-ups promoting growth of the online car buying industry are Cars24 and Spinny:
Cars24 Services Private Limited, founded in 2015 and headquartered in Gurugram, India, has rapidly become one of the leading platforms for purchasing and selling used cars in the country. The start-up raised a notable USD 400 million in a Series G round in 2021, which propelled its valuation to over USD 1 billion. Cars24 provides a hassle-free experience for sellers by providing instant quotes and a wide range of certified used cars.
Spinny, founded in 2015 and located in Gurugram, India, has gained popularity among consumers seeking reliable used cars. It achieved a valuation of approximately USD 1.1 billion as of 2021. The start-up has expanded its services to multiple cities in India by providing a transparent pricing model, a 5-day money-back guarantee, and detailed inspection reports for each vehicle. Furthermore, the platform provides financing and trade-in options.
Market players in the online car buying sector are primarily focused on enhancing consumer experience through technological advancements and streamlined processes. Key strategies include the development of user-friendly digital platforms that allow customers to easily compare prices, access detailed vehicle information, and complete transactions from home. Transparency in pricing and vehicle history is also a significant focus to foster trust among consumers.
Asbury Automotive Group, Inc. is a leading car dealership company founded in 1995 and headquartered in Georgia in the United States. This company offers an extensive range of automotive products and services to customers.
AutoNation, Inc. is a prominent car dealership company offering automotive products and services including new...
CarGurus, Inc. is a popular automotive research and shopping website which enables customers in contacting the...
Lithia Motors, Inc., founded in 1946 and headquartered in Oregon, United States, is one of the largest automot...
*Please note that this is only a partial list; the complete list of key players is available in the full report. Additionally, the list of key players can be customized to better suit your needs.*
Other online car buying market players include MH Sub I, LLC (CarsDirect), Cars.com Inc., Group 1 Automotive, Inc., Cars24 Services Private Limited, Hendrick Automotive Group, and TrueCar, Inc., among others.
*While we strive to always give you current and accurate information, the numbers depicted on the website are indicative and may differ from the actual numbers in the main report. At Expert Market Research, we aim to bring you the latest insights and trends in the market. Using our analyses and forecasts, stakeholders can understand the market dynamics, navigate challenges, and capitalize on opportunities to make data-driven strategic decisions.*
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In 2023, the market reached an approximate value of USD 334.10 Billion.
The market is assessed to grow at a CAGR of 11.90% between 2024 and 2032.
The market is estimated to witness healthy growth in the forecast period of 2024-2032 to reach a value of around USD 919.07 Billion by 2032.
Growing transition from traditional to online modes of car buying for more personalised experiences, rising disposable income, heightened adoption of smart devices, and several advantages offered by online car buying are the major drivers of the market.
The key trends in the market include the changing preference of customers towards avoiding stressful negotiations, increasing online promotions by dealerships of their products and deals, and rising demand for pre-owned vehicles.
Hatchback, sedan, and SUV, among others, are the different vehicle types in the market for online car buying.
Petrol, and diesel, among others, are the major propulsion types in the market for online car buying.
Asbury Automotive Group, Inc., AutoNation, Inc., CarGurus, Inc., MH Sub I, LLC (CarsDirect), Cars.com Inc., Cars24 Services Private Limited, Group 1 Automotive, Inc., Hendrick Automotive Group, Lithia Motors, Inc., and TrueCar, Inc., among others, are the key online car buying market players, according to the report.
Explore our key highlights of the report and gain a concise overview of key findings, trends, and actionable insights that will empower your strategic decisions.
| REPORT FEATURES | DETAILS |
| Base Year | 2023 |
| Historical Period | 2018-2023 |
| Forecast Period | 2024-2032 |
| Scope of the Report |
Historical and Forecast Trends, Industry Drivers and Constraints, Historical and Forecast Market Analysis by Segment:
|
| Breakup by Vehicle Type |
|
| Breakup by Propulsion Type |
|
| Breakup by Category |
|
| Breakup by Region |
|
| Market Dynamics |
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| Competitive Landscape |
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| Companies Covered |
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United States (Head Office)
30 North Gould Street, Sheridan, WY 82801
+1-415-325-5166
Australia
63 Fiona Drive, Tamworth, NSW
+61-448-061-727
India
C130 Sector 2 Noida, Uttar Pradesh 201301
+91-858-608-1494
Philippines
40th Floor, PBCom Tower, 6795 Ayala Avenue Cor V.A Rufino St. Makati City, 1226.
+63-287-899-028, +63-967-048-3306
United Kingdom
6 Gardner Place, Becketts Close, Feltham TW14 0BX, Greater London
+44-753-713-2163
Vietnam
193/26/4 St.no.6, Ward Binh Hung Hoa, Binh Tan District, Ho Chi Minh City
+84-865-399-124
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