Vietnam’s used car market is growing fast, but it faces tough challenges in 2025. Here’s what you need to know:
- Market Growth: Valued at USD 10.3 billion in 2024, it’s expected to grow at 14.4% annually, reaching USD 39.55 billion by 2034.
- Key Trends: Rising urbanization, a growing middle class, and online platforms are shaping the market. EVs are gaining traction, with 18.4% growth expected in the used EV segment by 2034.
- Economic Hurdles: High interest rates, reduced buying power, and falling prices haven’t boosted sales. Import taxes and fees make used cars costlier than new ones.
- Consumer Shifts: Buyers now demand quality, transparency, and better service. EV incentives and new car policies are pulling buyers away from used cars.
- Competition: Imported vehicles and new EVs are intensifying competition, leaving used car dealers struggling to stay relevant.
The market’s future depends on better inspections, clearer pricing, and readiness for the EV shift. Dealers and platforms that focus on trust and transparency could thrive in this evolving landscape.
Fee reduction bolsters domestic automobile market
Economic Problems Affecting Used Car Sales
Vietnam’s used car market, despite its promise, is grappling with several economic challenges that are affecting both buyers and sellers. Let’s dive into the main issues.
Higher Interest Rates and Reduced Buying Power
In 2023, rising bank interest rates made financing less accessible, leading to a 25.37% decline in auto finance market activity. Higher rates mean larger monthly loan payments, making cars less affordable for those relying on financing. This trend has directly impacted motor vehicle sales, which also dropped by 25.37% during the year. On a brighter note, experts anticipate that as interest rates stabilize, consumer confidence may improve, encouraging lending and potentially aiding recovery in the auto finance market.
Price Drops Without a Boost in Sales
Even with used car prices falling by 20–30%, demand remains sluggish. Several factors contribute to this. Government incentives for new cars are pulling buyers away from the used car market. Additionally, the growing appeal of electric vehicles is shifting consumer interest toward newer, tech-forward options. Economic uncertainties, combined with higher rates and reduced purchasing power, further weaken demand. Buyers are also becoming more selective, preferring well-maintained or in-demand models. Meanwhile, high dealer prices continue to hinder broader market growth.
An expert from the Vietnam Automobile Manufacturers Association (VAMA) shared their outlook:
"Automotive industry sales in 2025 will improve compared to 2024, but there will be no breakthrough yet."
Increased Regulatory Costs
New policies and fees are driving up the cost of used cars. The regulatory framework has grown more complicated and expensive for both buyers and dealers. Import taxes on used cars are significantly higher than those on new ones, aimed at protecting the domestic car industry and addressing environmental concerns.
| Engine Size | Import Duty | Special Consumption Tax | VAT | Total Tax Burden |
|---|---|---|---|---|
| Below 1.5L | 70% | 45% | 10% | Very High |
| 1.5L to 2.5L | 80% | 55% | 10% | Extremely High |
| Above 2.5L | 100% | 75% | 10% | Prohibitive |
These taxes make importing used cars considerably more expensive than new ones. On top of that, frequent policy changes add uncertainty and extra costs for dealers.
These economic and regulatory hurdles paint a challenging picture for Vietnam’s used car market, with buyers and sellers alike feeling the strain.
Changing Consumer Habits and Market Competition
Vietnam’s used car market is undergoing a transformation. Buyers are increasingly prioritizing quality, transparency, and service, while government policies and advancements in technology are reshaping the competitive landscape. These shifts are creating new challenges and opportunities for the industry.
Government Support for New Car Purchases
The Vietnamese government has introduced policies that favor new car purchases, putting the used car market at a disadvantage. For instance, Decree 51/2025/ND-CP provides electric vehicle (EV) registration fee exemptions until 2027, a move that has significantly boosted new car sales. Take Vu Phuong from Hanoi, for example – he saved over VNĐ200 million on his VinFast VF 9 thanks to these exemptions.
Another measure, Decree 73/2025/ND-CP, reduces taxes by 10–15% on imported vehicles from countries without direct trade agreements, making new cars more affordable.
Economic expert Dinh Trong Thinh highlights the broader goal of these policies:
"This policy aims to encourage the adoption of electric vehicles, contributing to environmental sustainability and the transition to greener transport solutions."
However, such initiatives come with trade-offs. The Ministry of Finance estimates that the zero percent registration fee for EVs will reduce state budget revenue by more than VNĐ4.8 trillion (USD 192 million) annually. For the used car market, these policies add another layer of difficulty in competing with new vehicles.
Electric Vehicle Growth Impact
The rapid growth of electric vehicles is reshaping Vietnam’s automotive market. Monthly first-time EV registrations surged from 404 in 2022 to 6,648 in 2024. In the same year, VinFast led the market with 87,000 EVs sold, contributing to a total of 97,000 electric and hybrid vehicles sold – over 22% of all new passenger car sales. By the end of 2025, electric and hybrid vehicles are expected to account for 15–20% of total passenger car sales in Vietnam.
This trend is particularly challenging for used cars priced above VNĐ800 million, as buyers are increasingly drawn to the modern features and incentives associated with new EVs. International brands are also entering the market, intensifying competition. Hyundai, for instance, launched the IONIQ 5 in Vietnam in August 2023, offering a 58-kWh battery, 170 hp, and a range of 384 km per charge. Meanwhile, Chinese electric cars are also making their presence felt.
The most active market segments are now small electric cars, affordable EVs, and mid-range hybrids. For used car sellers, only well-maintained or highly sought-after models are likely to retain their value in this shifting landscape.
Higher Customer Expectations
As the automotive market evolves, so do consumer expectations. Vietnamese buyers now demand quality assurances, transparent pricing, and excellent customer service when considering used cars. Features like comfort, safety, and sustainability are becoming top priorities.
The rise of online platforms is also changing how people shop for used cars. Mobile apps and online marketplaces now make it easier for buyers to compare prices and browse a wide selection of vehicles. Social media and online classifieds further simplify the process by offering detailed information about available cars.
These changes are forcing dealers to adapt. To stay competitive, they need to focus on offering well-maintained vehicles, competitive pricing, and value-added services. Transparency and customer service are no longer optional – they’re essential. Dealers who fail to meet these new standards risk losing customers to those who provide a more seamless and customer-centric experience.
Market Structure and Policy Problems
Vietnam’s used car market is grappling with several structural challenges, making it a tough landscape for both buyers and sellers. A fragmented dealer network, growing competition from imported vehicles, and shifting government policies all contribute to the complexity.
Scattered Dealer Network
The used car market in Vietnam is highly fragmented, with about 60% of car sales occurring through informal peer-to-peer transactions, which often lack transparency and reliability. This unorganised structure fuels consumer mistrust, with 47% of buyers hesitant to purchase used cars due to concerns over hidden defects.
Unlike the new car market, where warranties and standardised processes offer peace of mind, the used car market lacks consistent quality assurance. This absence of uniform standards creates a trust gap, hampering the market’s potential for growth. Buyers often struggle to verify vehicle conditions or histories, which adds to their reluctance.
That said, there are signs of improvement. Organised platforms are gaining traction by offering better buying experiences and additional services like warranties and certifications. Online marketplaces such as Cho Tot Xe, AnyCar.vn, and Oto.com.vn are stepping in to address these issues. They provide services like vehicle inspections, financing, and insurance, making transactions more transparent. In fact, 35% of used car sales in Vietnam were conducted online in 2023, reflecting a shift toward more reliable and organised sales channels.
However, this fragmentation also leaves the market vulnerable to competition from imported vehicles.
More Imported Ready-Made Vehicles
The trust issues plaguing the unorganised used car market are further compounded by the growing popularity of imported new vehicles. In April 2025, imports surged by 35%, highlighting a clear shift in consumer preference toward international models. This trend puts additional pressure on used car dealers, as buyers increasingly opt for new vehicles.
The influx of new brands, particularly from China and Europe, is reshaping the market landscape. In 2024 alone, seven new Chinese brands entered Vietnam, bringing the total to 13 – surpassing Japan’s nine brands. Many of these manufacturers are setting up local production facilities, making their vehicles more competitively priced and appealing compared to used cars.
This wave of imported vehicles creates pricing challenges for used car dealers. With competitively priced new cars offering modern features and warranties, the appeal of used cars – especially in higher price ranges – diminishes significantly.
Government Policies and Expected Changes
Adding to the market’s challenges is the impact of evolving government policies, which heavily favour new vehicles over used ones. A major policy shift occurred in March 2025 with Decree No. 51/2025/ND-CP, extending the full exemption of electric vehicle (EV) registration fees until February 28, 2027. This extension builds on incentives introduced in 2022 and aims to accelerate EV adoption among both consumers and businesses.
These policies provide clear financial benefits for new car buyers, including tax breaks, rebates, lower financing rates, and reduced registration fees for domestically produced vehicles. The results are clear: demand is expected to hit 800,000–900,000 cars in 2025, potentially climbing to 1.8 million by 2030. These benefits primarily drive new car sales, leaving the used car market struggling to compete.
Vietnam’s free trade agreements also play a role, reducing trade barriers and giving manufacturers access to advanced technology and export opportunities. This makes it easier for international brands to enter the market with competitive pricing. As policies and consumer preferences continue to evolve, the interplay between used cars, new cars, and EVs will shape the market’s future.
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Solutions for Market Challenges
Vietnam’s used car market faces several obstacles, but there are practical ways to address these issues and rebuild trust. The focus should be on three key areas: improving vehicle inspections, using technology to ensure pricing clarity, and preparing for the growing demand for electric vehicles (EVs).
Better Vehicle Inspections and Certification Programs
One of the biggest hurdles in Vietnam’s used car market is the lack of trust due to inconsistent quality standards. A clear solution is to enforce strict inspection protocols and create standardized certification programs.
Every used car could undergo a thorough multi-point inspection, covering critical areas like engine performance, safety features, electronics, and structural integrity. These inspections would be conducted by certified professionals using standardized checklists to ensure uniformity. Additionally, detailed vehicle history reports – covering past accidents, maintenance records, and ownership changes – would provide buyers with the information they need to make confident decisions. This level of transparency could offer buyers peace of mind similar to what they get with new car warranties.
To make this system work, the government could establish accredited inspection centers in major cities and conduct regular audits to maintain quality. Dealers who consistently meet these standards could earn official certification badges, making it easier for consumers to identify reliable sellers.
Digital tools can further enhance this process by offering easy access to these certifications and inspection details online, adding another layer of transparency.
Using Online Platforms for Clear Pricing
Pricing transparency is another challenge that digital platforms can help solve. With nearly 80% of Vietnam’s population – 77.93 million people – using the internet as of January 2023, there’s significant potential to transform how used cars are bought and sold online.
Take Chotot’s automotive segment, which saw a 30% increase in used car listings in 2023. Similarly, Bonbanh.com recorded 150,000 transactions in 2024. These numbers highlight how ready Vietnamese consumers are for a digital shift in the used car market.
AI-powered pricing tools can play a key role here. By analyzing factors like vehicle condition, mileage, age, and market demand, these tools can provide real-time, accurate valuations. Studies show that 88% of buyers are more likely to trust dealerships offering transparent pricing. Not only can this approach boost sales by up to 20%, but it can also increase customer satisfaction by 40%.
"There’s a gap in the genuine car market in Vietnam due to a lack of variety and the ability to compare prices and quality across car dealerships. Vietwheels addresses this issue by bringing buyers and sellers closer together through a streamlined platform." – Vince Lương, Co-founder, Vietwheels
The rise of organized platforms is already making an impact. For instance, in November 2023, Carpla launched its fifth Automall in Hanoi, featuring over 4,000 m² of space dedicated to buying and selling used cars. With tools like dynamic pricing, dealerships can clearly explain their pricing methods, making the buying process more transparent and earning the trust of consumers.
These advancements also set the stage for tackling the emerging EV market.
Preparing for the Electric Vehicle Shift
Vietnam’s growing interest in electric vehicles (EVs) presents both challenges and opportunities for used car dealers. EV market share in Vietnam climbed from 9.2% in 2023 to 21.3% in 2024, and hybrid and electric vehicles are expected to account for 15–20% of total passenger car sales by the end of 2025. Dealers who adapt to this trend now will be better positioned for future success.
One way to prepare is by creating EV-specific certification programs. These should address unique EV concerns like battery health, charging systems, and software updates, with technicians trained specifically in EV technology.
Another important step is investing in on-site charging facilities. This infrastructure not only enables EV test drives but also demonstrates a dealership’s commitment to the EV market. Offering services like battery health checks and software updates can further set dealerships apart, giving them a competitive edge.
The government’s decision to extend the 100% registration fee exemption for EVs through 2027 is expected to boost new EV sales. This creates an opportunity for used car dealers to specialize in certified pre-owned EVs, offering warranties and service packages to attract buyers.
Globally, EV sales are projected to exceed 20 million by 2025, accounting for over a quarter of all car sales. Dealers in Vietnam who start building expertise and infrastructure for EVs now will be well-prepared to capture a share of this growing market.
Conclusion: The Future of Vietnam’s Used Car Market
Vietnam’s used car market is on a transformative journey, presenting both challenges and opportunities. Its projected growth from VNĐ246 trillion (USD 10.5 billion) in 2024 to an estimated VNĐ1,000 trillion (USD 41.3 billion) by 2033, with an annual growth rate of 14.8%, highlights its immense potential despite current hurdles.
The rise of electric and hybrid vehicles is reshaping the landscape. These vehicles already account for over 22% of new car sales in 2024, with expectations of 25–30% growth in 2025. This shift is forcing the used car market to evolve, as seen with VinFast’s market share leap from 9.2% in 2023 to 21.3% in 2024.
Industry players are adjusting their strategies to align with these changes. Vu Ba Phu, director of the Trade Promotion Agency under the Ministry of Industry and Trade, emphasizes the factors driving growth:
"The market is forecast to register a growth rate of 12 per cent in 2025 compared with 2024, bolstered by economic growth, growing per capita income, and rising demand for personal vehicles. This growth has been attributed to car sales, diverse product lines, a robust second-hand car market, and improved after-sale services."
Digital platforms are playing a crucial role in making the market more transparent. Platforms like Bonbanh.com have shown that Vietnamese consumers are willing to embrace online car buying when trust and transparency are prioritized.
Collaboration among stakeholders will be the cornerstone of success. Government initiatives to promote electric vehicle adoption, dealer investment in certification programs, and online platforms offering transparent pricing all need to work in harmony.
The future of the market depends on its ability to adapt. According to KPMG, 70% of Vietnamese consumers are open to purchasing electric or hybrid vehicles, with Gen Z and Millennials leading this shift. The key to success lies in embracing change – improving certification processes, leveraging digital tools for pricing, and integrating EV technology. Those who prioritize transparency, quality, and innovation will lead the way in this evolving market.
FAQs
What economic factors are shaping Vietnam’s used car market in 2025?
Vietnam’s Used Car Market in 2025: Challenges Ahead
Vietnam’s used car market is expected to face a tough road in 2025. Rising prices for second-hand vehicles and sluggish sales growth are becoming major hurdles. Many buyers are now leaning toward new and electric cars, thanks to government incentives that make these options more appealing.
On top of that, supply chain disruptions and labour shortages are creating additional headaches. These issues are tightening inventory levels and affecting how efficiently businesses can operate, making it even harder to navigate the market.
Interestingly, while higher disposable incomes and economic growth could potentially increase demand, they’re also steering consumer preferences toward newer, more sustainable vehicles. This shift means used car sellers might need to rethink their strategies. Adding to the complexity are regulatory changes in the automotive sector, which could bring new challenges for both businesses and buyers.
How is the growing popularity of electric vehicles affecting Vietnam’s used car market, and what can dealers do to adapt?
The growing popularity of electric vehicles (EVs) in Vietnam is transforming the used car market. By 2025, EVs are projected to make up 20% of new car sales. This shift is largely fueled by advancements in technology and a stronger focus on environmentally friendly transportation. As a result, traditional used cars are facing new competition, with many buyers now leaning toward greener, more innovative options.
For dealers to stay relevant, adapting to these changes is key. Expanding inventories to include electric and hybrid models can meet the rising demand for sustainable choices. Leveraging digital marketing strategies is another effective way to connect with eco-conscious buyers. On top of that, providing flexible financing options for EVs can remove barriers and make these vehicles more appealing to a wider audience. By aligning with the push for sustainability, dealers can carve out opportunities in this evolving market.
How can transparency and trust be improved in Vietnam’s used car market?
Improving openness and reliability in Vietnam’s used car market calls for actionable measures to tackle common issues. One effective approach is introducing standardized vehicle history reports and certification programs. These tools can give buyers access to verified details about a car’s condition, past ownership, and maintenance history. This added clarity helps ease doubts and boosts confidence during transactions.
Another key step is establishing government-regulated platforms for buying and selling used cars. Such platforms can act as trustworthy intermediaries, promoting fair practices and curbing fraudulent activities. Combined, these efforts can create a safer and more dependable environment for second-hand car buyers and sellers in Vietnam.
