KSA Used Cars Market Outlook to 2030

KSA Used Cars Market Overview

• The KSA used cars market is valued at USD 5.35 billion, driven by increasing demand for affordable transportation, the rise of online car marketplaces, and shifting consumer preferences toward used vehicles due to economic factors. The affordability of used cars compared to new ones is particularly attractive to middle-income groups, especially in light of inflationary pressures and the need for cost-saving solutions. Additionally, the increasing popularity of certified pre-owned programs adds value and trust, boosting the overall market.
• Dominant cities in the KSA used cars market include Riyadh, Jeddah, and Dammam. These cities have a high population density, higher disposable incomes, and greater economic activities, resulting in higher car ownership rates. Moreover, these urban centers have established networks of dealerships, which facilitate the accessibility and availability of a variety of used vehicles. Online car marketplaces and dealerships also thrive in these regions, driven by digital penetration and consumer convenience.
• Saudi Arabias government imposes strict regulations on the import of used vehicles, limiting their age to no more than five years. According to the Saudi Customs Authority, in 2023, around 40,000 used vehicles were imported into the Kingdom under these guidelines. These regulations are designed to reduce emissions, improve road safety, and prevent the influx of outdated, less efficient vehicles. This policy continues to shape the availability and price of imported used cars, particularly those sought after by budget-conscious consumers.

KSA Used Cars Market Segmentation

• By Car Type: The KSA used cars market is segmented by car type into sedans, SUVs, hatchbacks, and trucks. Among these, sedans dominate the market share. The dominance of sedans in the KSA used cars market is attributed to their fuel efficiency and affordability, making them the preferred choice for urban commuting. Sedans are favored for family use and everyday transportation, with models from brands like Toyota and Hyundai maintaining a strong presence. Their lower maintenance costs and availability in certified pre-owned programs further boost their popularity.

• By Sales Channel: The KSA used cars market is segmented by sales channel into dealerships, online platforms, and private sales. Dealerships dominate the market share due to the trust and warranty they provide. Certified pre-owned programs, often offered by dealerships, give buyers confidence in vehicle quality, inspection, and post-sale services. Moreover, dealerships offer financing options, which make it easier for consumers to purchase used cars. Additionally, the organized dealership sector is perceived as more transparent, contributing to its leading market position.

KSA Used Cars Market Competitive Landscape

The competitive landscape is dominated by both domestic and international players, including prominent names like Abdul Latif Jameel Motors and Aljomaih Automotive Company. These firms have established a strong presence across the KSA, benefiting from extensive dealership networks and long-standing relationships with customers. Additionally, online platforms such as CarSwitch and Beepi Saudi have gained traction, particularly among younger, tech-savvy buyers who prefer the convenience of digital transactions.

KSA Used Cars Industry Analysis

Growth Drivers

• Increased Demand for Affordable Vehicles: The rising cost of new vehicles and economic challenges have driven the demand for affordable used cars in Saudi Arabia. As of 2024, the middle-class population in Saudi Arabia has grown significantly, which has amplified the need for cost-effective transportation options. According to the World Bank, the GDP per capita of Saudi Arabia reached approximately 27,000 USD in 2023, creating a substantial market for budget-conscious consumers. This growing demand for used cars offers an affordable alternative for the rising population seeking to balance quality with cost.
• Digital Platforms for Used Car Sales: The rise of digital platforms has revolutionized the way used cars are bought and sold in Saudi Arabia. By 2024, over 33 million internet users in the countrysupported by a 97% internet penetration rateare expected to drive this trend. Platforms like Haraj and Motory have simplified the buying process by offering detailed vehicle listings, reducing transaction time and improving buyer confidence. The IMF reported that increased digitization within the Kingdoms retail sectors is projected to accelerate economic activities and support online car sales.
• Rising Middle-Class Population: Saudi Arabia's middle class is steadily expanding due to economic reforms, creating increased demand for quality used cars. In 2022, Saudi Arabias population crossed 36 million, with a substantial portion contributing to the middle-income group, according to the World Bank. This group is increasingly looking toward used vehicles as they provide a balance between affordability and value. This population growth, coupled with urbanization, fuels the expanding market for pre-owned cars, particularly among individuals and families aiming to minimize costs without sacrificing vehicle quality.

Market Restraints

• Limited Financing Options: Despite growing demand, financing options for used cars in Saudi Arabia remain limited. As of 2023, approximately 65% of car buyers in the Kingdom still rely on direct cash transactions, creating barriers for lower-income individuals. According to the IMF, the lack of financial products tailored to the used car market has slowed down overall sales, as many consumers are unable to afford vehicles upfront. Expanding financing solutions could mitigate this challenge, but the gap persists as a significant issue within the market.
• Fluctuating Import Tariffs: Changes in import tariffs have had a direct impact on the availability and pricing of used cars in Saudi Arabia. In 2022, Saudi Arabia imposed a 15% VAT, which affected the cost of importing vehicles. Additionally, tariffs on imported vehicles from non-GCC countries have been adjusted periodically, making it more expensive for dealers to bring in used cars. According to the Saudi Arabian General Authority of Zakat and Tax, these fluctuating tariffs have complicated pricing strategies and reduced the profitability of the used car trade.

KSA Used Cars Market Future Outlook

Over the next five years, the KSA used cars market is expected to see consistent growth, driven by increasing demand for affordable vehicles and the growing popularity of certified pre-owned programs. The expansion of online platforms and digital solutions will continue to disrupt traditional dealership models, making the car buying process more convenient and transparent for consumers. Furthermore, economic conditions, including fluctuating oil prices and inflation, will encourage more consumers to opt for used cars over new ones. Government regulations and support for digital platforms in the automotive space are also likely to play a significant role in the markets evolution.

Market Opportunities

• Expansion of Certified Pre-Owned Car Programs: The demand for certified pre-owned (CPO) vehicles is gaining traction in Saudi Arabia as consumers seek trusted, quality-assured cars. CPO programs are expected to thrive due to their ability to offer transparency, warranties, and better financing options. In 2023, over 12,000 certified pre-owned vehicles were sold in Saudi Arabia, indicating a clear shift toward this model. With the rising middle-class population and trust issues in non-certified vehicles, CPO programs are poised to expand significantly.
• Online Car Marketplaces: The rise of online marketplaces represents a significant opportunity for the Saudi used car market. By 2023, platforms such as Haraj attracted over 8 million unique monthly visitors, enabling sellers to reach a wide audience and streamline transactions. As e-commerce continues to flourish in Saudi Arabia, which boasts 34.8 million internet users in 2024, these platforms will play a vital role in reshaping how used cars are bought and sold, providing growth potential in both urban and rural areas.