As new cars reach the end of the four-year cycle, China's used car industry is growing and providing a challenge for the country to develop a modern market.
About four years ago, Chinese began buying new cars in droves; experts say four years is the average length of time drivers will use a vehicle before trading it in, The Associated Press reported.
Used car sales growth actually topped that for new vehicles last year, although new cars outsold used three to one in volume. The secondhand market in China could eventually see growth similar to the U.S., where the ratio is reversed.
In 2012, China's used car sales rose 11 percent to 4.8 million vehicles, while new car sales rose 7 percent to 15.5 million, according to the AP.
China's challenge is developing a modern market for used cars, which are currently sold by thousands of small trading companies working in big trading halls or at open air markets.
"The used car business in China is very different to anything that you would recognize in the Western world," said Marin Burela, president of Changan Ford, the U.S. company's China joint venture.
An estimated four out of five used car deals take place at these markets. While vehicles are sold without tax and ownership can be transferred in a day, both quality and fair prices are up in the air due to the lack of regulations.
Buyers like 28-year-old Liu Yu-chen just plan to look over their purchases closely first.
"After conducting a good inspection, you just need to figure out whether the car appears to have been in any accidents," Yu-chen said.
Looking for his potential first car at Guangzhou's Guangjun Used Car Market, Liu is planning to spend up to 1 million renminbi ($164,000) for a used Land Rover and doesn't consider that a high price. Due to taxes and foreign carmakers charging as much as they can, luxury vehicles tend to be on the pricey side in China.
"What I want to buy is a well maintained car, no damage. Scratches don't matter," Liu said. "If there's no big problem with the bumpers, no weird sound from the engine, then I'll consider it."
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