The end of May 2016 was the deadline, imposed by an eight-article guideline issued by the State Council to local governments, to abolish any limits on inflows of second-hand vehicles from other regions.
Three regions were excluded, to help them attain air pollution control targets. The Beijing-Tianjin-Hebei region, Yangtze River Delta, and Pearl River Delta are also applying higher gasoline and emission standards.
"It is expected that 90 percent of Chinese cities will open their markets to non-local used vehicles, since inspection teams will continue to oversee the actions of local governments," said Xiao.
"The Chinese market is home to about 210 million vehicles in use. With such a volume base, there's huge potential in the used vehicle trade." The association has found that the average price of the traded used vehicles climbed last year to 65,300 yuan ($10,400), and 43.5 percent of the vehicles in circulation were made between three to six years ago, while 24.7 percent are less than 3 years old.
"Last year the market is signaled an upgrade in used-vehicle consumption," Luo said.
The used vehicle market may continue its fast-track expansion to 15 million units this year for an annual growth rate of 15-20 percent, according to the association's prediction.
Just over seven years after China became the world's biggest new automobile market in 2010, industry experts believe the time is ripe for the majority of car owners to replace their vehicles. They also expect the trend towards buying better cars will help accelerate the trade in Chinese used vehicles.
Yang Yongfeng, vice-president of Yixin Group which is specialized in the car trade and financial services, said he believed the development of car financing had also helped boost the sale of second hand cars.
Industry insiders say that the roaring trade in second hand cars is in response to higher build quality in locally made vehicles, which now last much longer. In mature auto markets such as the US, used car sales are typically between 2 and 2.5 times new car sales, but in China it is a nowhere no that level, indicating massive growth potential.
"Chinese customers who buy used cars are mainly short of cash, so plentiful financial products will help their purchases," he said.
"Besides, the abundant money flowing into the market will also help sellers finance their used car stocks."
