SAUDI ARABIA USED CAR MARKET

Saudi Arabia used car market is projected to witness a robust CAGR of 7.5% between 2025 and 2035 primarily driven by the growing population and the rising demand for affordable vehicles along with the emerging digital marketplaces.

Major Market Drivers and Emerging Trends

The increasing population is a major factor contributing to the growing demand for used car market in Saudi Arabia. With its population surpassing 34 million people there has been rising vehicle demand especially for used cars. This population growth is closely tied to the increasing used car sales especially in cities where vehicle ownership is essential for mobility and consumers are increasingly seeking affordable options for new vehicles.

In Saudi Arabia nearly half of the population is under 30 years old and with limited disposable incomes they tend to choose used cars over new ones. Expatriates also represent another customer base for used cars. Since many expatriates are often on short employment contracts they tend to choose used cars over new ones to avoid spending a substantial amount.

Middle class families and expatriates particularly are looking for more affordable alternatives to costly new vehicles. Arab News reported that new and used car imports are on the rise with car sales surpassing 700,000 annually. To meet this rising demand many dealerships are introducing competitive pricing and extra services for secondhand cars.

The growing internet user base along with higher smartphone penetration and the convenience offered by digital platforms are further propelling the Saudi Arabia used car market size growth. The growing preference for online platforms is owing to the convenience of avoiding physical visits and the ability to compare prices or car brands across various platforms. Consumers benefit from online platforms that offer timely doorstep delivery and diverse car collection from various brands and types. These platforms allow buyers to compare prices in real time and make secure payment options which has gained popularity among consumers. Modern vehicle inspection technologies now also provide detailed reports which offer more comprehensive details about a car’s condition.

The growing interest in secondhand vehicles in Riyadh is anticipated to fuel significant market growth. With its large population and status as the capital city Riyadh experiences a rising need for private transportation owing to its dense population. With its urbanization and residents looking for cheaper vehicle options the need for used cars is projected to grow. Used cars are appealing to first time buyers or people looking for affordable transportation solutions.

The growing wealth among consumers in Makkah is also likely to contribute significantly to market growth. The increasing affluence in Makkah has led to a higher demand for premium used cars especially luxury models. Consumers with higher income levels in Makkah frequently prefer used cars that combine prestige and luxury which offers an affordable alternative to new cars. Demand among wealthy consumers is experiencing significant growth with more luxury used cars available.

 Based on vehicle type the rising preference for sedans is significantly boosting market growth. Sedans are favored for their comfort and more affordable price in comparison to larger vehicles. The growing urban population and middle class segment have made sedans a practical option for many individuals. This trend is particularly strong in Jeddah and Riyadh where sedans are commonly chosen for personal or commercial purposes.

The SUV segment is seeing the fastest market growth fueled by consumer preferences and the unique geographic features. These cars are especially popular owing to their durable build and ability to adapt to different terrains which makes them perfect for large families.

Hatchbacks are also seeing a rising demand particularly among expatriates and young professionals who prefer compact cars for urban driving. These offer great fuel efficiency and maneuverability in tight spaces. First time buyers often prefer them because these models offer great efficiency and affordable maintenance costs.

Based on vendor type, the unorganized segment is responsible for most used car sales in the country. Customers tend to favor the unorganized sector because the used cars are priced lower which allows customers to avoid the 15% VAT that organized players typically charge. The increasing preference for organized dealers is also growing driven by the convenience they offer and additional benefits including warranties and certifications. The growth is also fueled by increasing consumer demand for professional services and quality assurance.

Based on fuel type, the growing popularity of the petrol segment is fostered by several factors including lower petrol prices and more readily available petrol powered cars. Segment growth is also driven by robust petrol distribution infrastructure in the country. Diesel vehicles are preferred in commercial sectors because of their enhanced torque and superior fuel efficiency.

Based on sales channel, the offline platform maintains a substantial market share especially among people who prefer direct transactions and the ability to inspect vehicles. Even though online platforms are gaining traction many buyers still choose the offline method when buying used cars. The offline market allows buyers to negotiate prices directly and get immediate support from sales representatives. This experience is essential in instilling confidence among consumers especially for major purchases including used cars.

The online segment has also seen significant growth fueled by the rising digital adoption along with the convenience ecommerce platforms offer. Digital platforms including YallaMotor or CarSwitch have made it easier for consumers to purchase used cars online. The platforms also provide services including price comparison options and remote inspections which further increase buyer confidence. The AI integration in car pricing and blockchain for secure transaction documentation has significantly enhanced the online sales process.

Top Market Players

Leading market players are YallaMotor, CarSwitch, Abdul Latif Jameel Motors among others. The market is characterized by a competitive dynamic with established international brands and regional players providing specialized solutions. The competition in the market is influenced by factors including location coverage and financing solutions. Companies are also working on their after sales support and dealership networks to strengthen their market presence.

Key Developments

• • In 2024, TUV Rheinland formed a strategic collaboration with SASO to verify that imported used cars comply with national and global regulations.
  • In 2023, Lumi Rental Company unveiled its second showroom for used car which further increases its presence in Saudi Arabia to address growing demand.
  • In 2023, the leading ecommerce platform for used car in Saudi Arabia Syarah revealed its new car servicing and refurbishing center for selling used cars.

Segments covered in the Report:

The Saudi Arabia Used Car Market has been segmented on the basis of Vehicle Type, Vendor Type, Fuel Type, and Sales Channel. Based on Vehicle Type, the market is segmented into Hatchbacks, Sedans, and Sports Utility Vehicles (SUV). Based on Vendor Type, the market is segmented into Organized and Unorganized. Based on Fuel Type, the market is segmented into Petrol and Diesel. Based on Sales Channel, the market is segmented into Offline and Online.

Market Segmentation

Saudi Arabia Used Car Market by Vehicle Type

• • Hatchbacks
  • Sedans
  • Sports Utility Vehicles (SUV)

Saudi Arabia Used Car Market by Vendor Type

• • Organized
  • Unorganized

Saudi Arabia Used Car Market by Fuel Type

• • Petrol
  • Diesel

Saudi Arabia Used Car Market by Sales Channel

• • Offline
  • Online

Major Players Operating in the Saudi Arabia Used Car Market

• • YallaMotor
  • CarSwitch
  • Abdul Latif Jameel Motors