Auto sector boost: Most car buyers use GST savings to upgrade to premium models; SUVs, EVs lead post-cut demand

A majority of car buyers have used recent GST reductions not to save money but to upgrade to higher-end models and brands, according to a new study. As per news agency PTI, around 80 per cent of buyers surveyed said they used the tax relief to switch to a better model, brand, or premium add-ons during the festive season.The findings come from the ‘Post GST Car Buying Behaviour Trends’ study by consumer-intelligence and market-research platform SmyttenPulse AI, which surveyed over 5,000 people in October 2025 across Tier 1, 2 and 3 cities. The report found that SUVs remain the most popular choice among buyers, while growing environmental awareness is significantly increasing electric vehicle (EV) consideration despite challenges such as limited charging infrastructure.“GST cuts have acted as a catalyst, but the larger story is behavioural: buyers are upgrading, not downsizing,” the study noted. Nearly 79 per cent of respondents said they used GST savings to move up to a higher model, brand, or better-equipped vehicle rather than saving the difference.According to PTI, more than 60 per cent of buyers plan to upgrade to higher variants within the same brand, and 46 per cent have already shifted from hatchbacks to larger vehicles like SUVs.

The study also found that 67 per cent of respondents cited ecological benefits as a major reason for considering EVs, even though concerns remain over battery life and replacement costs.Financial confidence appears to be returning, with 53 per cent of respondents ready to make higher down payments or opt for longer loan tenures. The report said that faith in policy support and industry incentives continues to sustain buyer optimism.“GST cuts have done more than make cars affordable; they’ve reignited aspiration,” said Swagat Sarangi, cofounder of SmyttenPulse AI, as per PTI “The middle-class buyer is using this moment to stretch upward, from base variants to top trims, from budget brands to feature-rich models”, Sarangi added.