China has had strong sales of second-hand cars since 2016 when authorities loosened regulation of the market.
In 2016, second-hand car trade volume hit more than 10 million units, up 10.3 percent year on year, the China Association of Automobile Manufacturers said.
In the first eight months of 2017, trade volume of second-hand cars exceeded 7.89 million units, increasing 20.85 percent on the same period in 2016.
According to the State Information Center of China (SICC), turnover is estimated to reach 18 million units in 2020.
In March 2016, the State Council issued a guideline on second-hand cars, requiring local governments to remove limits on the inflow of second-hand vehicles from other regions.
The guideline also called for better services for second-hand car registration, lower taxes and easier credit.
Previously, nearly 90 percent of major cities in China imposed emission limits on incoming second-hand vehicles, and some cities set much higher emission standards for incoming second-hand vehicles than for local ones, according to China Automobile Dealers Association (CADA).
Such limits almost blocked all trade in second-hand vehicles, reducing the value of second-hand cars and raising the cost for owners to buy new ones, CADA said.
By June 2017 about 135 Chinese cities in 13 provinces and regions had ended the policy of limiting the inflow of second-hand vehicles.
If more Chinese cities lift the emission limits this year, second-hand car trading volume is expected to increase by 3 million units in 2017, said Luo Lei, deputy secretary-general of CADA.
China is the world's largest auto market. In 2016, Chinese consumers purchased about 28 million new vehicles.
In most developed countries, sales of second-hand cars outnumber those of new vehicles by about two to one. Based on this rate, China's second-hand car trade volume would have exceeded 56 million units in 2016, far higher than the actual turnover of 10 million units, said Ding Yan, a SICC official.
"The ratio means China's second-hand car market has huge potential," Ding said.