As prices for new models rise, more Indian consumers are opting for refurbished smartphones and pre-owned cars.

With new smartphone sales expected to shrink even as the second-hand market expands, investors should monitor how this transition affects manufacturer profit margins, household purchasing power, and the growing influence of organized resale platforms.

According to data from Counterpoint Research, refurbished and pre-owned devices accounted for over 25% of total mobile unit sales, up from 23% last year.

The shift is striking given that the new smartphone market is forecast to shrink by 11% this year, while the used-phone segment is anticipated to expand by about 12%.

This development is mainly driven by a sharp increase in handset prices, which have risen on average by 30–35%, with certain models surging by as much as 70%.

Similarly, there is increased shift towards pre owned cars in automobile sector. According to Crisil research, sales of pre-owned cars rose to 6.1 million units in fiscal 2026, reflecting a 9% increase. By contrast, new car sales expanded by 8%, reaching 4.64 million units.

Demand for used vehicles is largely concentrated in urban and metropolitan markets, which account for over 66% of total sales, with buyers increasingly opting for SUVs and feature-rich models rather than basic hatchbacks.

The surge in new phone prices is largely driven by the increasing cost of memory chips—an essential smartphone component used across electronic devices—along with higher input and regulatory costs in the automotive industry. When manufacturers hike prices to safeguard their profit margins, they risk a decline in sales volumes.es.

Two round of price hikes have already happened in the automobile sector this year, making vehicles costlier by an average of 5%. This forms the major reason behind the shift in sentiment towards pre-owned cars.

If the preference for purchasing pre-owned items persists, it may constrain revenue growth for businesses that rely mainly on selling new products. In contrast, firms engaged in structured resale, refurbishment, and financing activities are likely to encounter expanding opportunities.