Used Phones and Cars Gain Traction as New Product Prices Soar

Kolkata | New Delhi: Repeated price hikes in smartphones and passenger vehicles are driving many consumers towards refurbished and second-hand products.

According to mobile phone sales tracker Counterpoint Research, refurbished and pre-owned devices accounted for more than a quarter (26%) of total smartphone unit sales during January-May this year, up from about 23% in the same period a year earlier. The research firm said the segment is expanding at its fastest pace, aside from the Covid disruption period.

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In automobiles, sales of pre-owned cars rose 9% to 6.1 million units in fiscal 2026 from 5.6 million in FY25, according to Crisil Research 0estimates. New car sales, by comparison, grew 8% to 4.64 million units, largely led by the GST rate reduction in September.

Smartphone prices have risen steadily since November as memory chip prices-a critical component-have surged two to three times amid strong demand from artificial intelligence data centres. Industry executives estimate handset prices to have increased up to 70%, with an average of 30-35%, in this period.

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Smartphone maker Lava International chief executive Sunil Raina said the used-phone market received a major boost this year as entry-level 4G smartphones virtually disappeared from the sub-Rs 10,000 segment following successive price hikes.

"Although consumer financing is available in smaller towns, not everyone qualifies as lenders have tightened eligibility norms. As a result, a section of buyers is shifting to second-hand smartphones," he said.

Counterpoint Research director Tarun Pathak said the second-hand smartphone market is expected to grow about 12% this year, while the new handset market is projected to decline 11%. "Consumers are increasingly opting for pre-owned devices as new smartphones have become significantly more expensive," he said.

Second-hand phone market expanding at ‘fastest pace’; used car sales rise as cos hike prices of new vehicles

Analysts project sales in India's handset market, both new and used devices, to be around 190 million units in 2026.

In the automobile sector, two rounds of price hikes have already happened this year, making vehicles costlier by 5% on an average. This is driving many buyers to look for cheaper options.

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Used-car sales platform Cars24 chief financial officer Shivanshu Makkar said rising input costs and regulatory changes have pushed up new-car prices, prompting many consumers to consider certified used vehicles as a more economical alternative.

"The value gap between a new car and a well-maintained certified used vehicle remains substantial," he said.

According to Cars24, demand is being led by urban markets, with metro cities contributing more than 66% to used-car sales. Buyers are increasingly choosing feature-rich models and SUVs in the segment rather than entry-level hatchbacks.