Automotive Loan Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028, Segmented By Vehicle Type [Two-Wheeler, Passenger Car, Commercial Vehicle], By Provider Type [Banks, NBFCs (Non-Banking Financial Companies, OEM (Original Equipment Manufacturer), Others (Fintech Companies)], By Percentage of Amount Sanctioned [Less than 25%, 25-50%, 51-75%, More than 75%], By Tenure [Less than 3 Years, 3-5 Years, More than 5 Years], By Region, Competition
Published Date: February - 2025 | Publisher: MIR | No of Pages: 320 | Industry: BFSI | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request CustomizationAutomotive Loan Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028, Segmented By Vehicle Type [Two-Wheeler, Passenger Car, Commercial Vehicle], By Provider Type [Banks, NBFCs (Non-Banking Financial Companies, OEM (Original Equipment Manufacturer), Others (Fintech Companies)], By Percentage of Amount Sanctioned [Less than 25%, 25-50%, 51-75%, More than 75%], By Tenure [Less than 3 Years, 3-5 Years, More than 5 Years], By Region, Competition
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Global Automotive Loan Market Size (2023 and Beyond)
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2023 Market SizeThe global automotive loan market was valued at approximately USD 1.5 trillion to USD 2 trillion in 2023.
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Growth RateThe market is expected to grow at a Compound Annual Growth Rate (CAGR) of around 6% to 8% from 2023 to 2030.
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2030 ProjectionBy 2030, the market is anticipated to reach USD 2.5 trillion to USD 3 trillion, driven by increasing vehicle ownership and financing penetration in emerging markets.
The automotive loan market is witnessing robust growth due to different factors such as changing preference towards modern lifestyle by replacing old models with modern models to improve the driving experience which has led to an increase in automotive sales, particularly in the metro cities. Consequently, with the rise in transportation activities in industrialization, due to which more consumers are looking out for automotive loans are few of the reasons, leading to the demand for automotive loans across the globe during the forecast period.
Automotive loan is provided by various financing companies which helps in buying a vehicle. Generally, the lender lends the money, and the borrower is required to return the loan in equated monthly instalments (EMIs) over a defined tenure at a specific interest rate. On the basis of vehicle, there is segment of two-wheeler loan which helps an individual to buy motorcycle and scooter and pay it later with EMIs. Passenger car includes hatchback, sedan, SUV and MPV. A commercial vehicle loan gives money to borrowers so they can purchase a vehicle for business or commercial use. Commercial vehicles include light, medium and heavy commercial vehicles. The purchase of these vehicle usually operated for commercial or industrial purposes which is financed by the services of commercial vehicle loans. Additionally, automotive loan is primarily provided through banks, NBFCs (non-banking financial companies, OEM (original equipment manufacturer), others (fintech companies) over a specified tenure and interest rate.
According to a report of Federal Reserve in the United States, around 35% of Americans depend on loan to pay for car. Moreover, Americans' total consumer debt is composed of 9.5% of auto loans. According to the report of MarkLine 2021, the automotive sales in United Staes is around 15.05 million, China automotive sale is 26.25 million, Germany automotive sale is 2.62 million. According to data, Americans have trillions of dollars in auto loan debt because of the high auto loan interest rates. In 2022, according to Federal Reserve Bank of New York quarterly report on household debt and credit, Americans currently owe USD1.52 trillion in automotive loan. Therefore, the above mentioned data show that despite being in debt the Americas are still buying vehicle by loan which is driving the automotive loan market.
Commercial Vehicle Loan Fuels the Market Growth
During the forecast period, it is anticipated that the commercial vehicles segment would have significant expansion. Commercial vehicles are more expensive than other types of vehicles, thus many banks and financial institutions have developed affordable loan plans with transparent terms and conditions. Additionally, approving loans for commercial vehicles requires less time than loans for personal vehicles. Hence, with the rise in commercial vehicles sales, the demand for commercial vehicle loans is also rising, For instance, in 2022 around 12.05 million commercial vehicles were sold in the United States and 3.3 million passenger cars were sold. Therefore, the above-mentioned factors are expected to support segment expansion. The expansion of the market is also being fueled by the increased demand for light commercial vehicles, which is being fueled by their adaptable performance in different conditions.
Expansion of Mobile and Web-Based Platforms is Fueling the Market Growth
Online lending services are one of the most innovative technologies that are currently gaining popularity in the market for automotive loans. Applications for smartphones and the web platforms that allow users to borrow money from lenders are easily found at to lend loan. In comparison to traditional financing options, web- and mobile-based platforms helps individuals in applying, evaluating, and assisting for loan services. Additionally, with the rise in fintech platforms, automotive loans are simplified by enabling end-to-end digital loan approval, processing, and payment. Fintech industry is radically changing the landscape of finance industry worldwide in number of ways. Some of the main attributes of fintech industry are credit access, enhanced transaction speed, efficiency, refinancing and transparency. Therefore, above factors are also fueling the market growth of automotive loan industry across the globe.
Banks are Gaining Significantly More Prominence Globally which is Driving Market Growth
Automotive loan allows an individual to buy a vehicle by borrowing money to pay the seller. Due to the lower interest rates offered by banks and trust factor that customers have toward banks, banks considered to be most preferred financing options by borrowers, therefore, banks dominated previous years and are expected to continue to dominate the automotive loan market throughout the projected period. Auto financing penetration in passenger vehicles grew from 75% at the beginning of 2020 to almost 80% in 2021. Due to the wide range of auto loan alternatives offered by banks, banks offer consumers the option for pre-approval. Previously, banks offered loan between 70 and 80% of the total cost of the vehicle. However, these banks are now providing 100% loan for the vehicle. This feature helps to compare estimated loan offers which is also helpful for customers. Therefore, various benefits offered by banks will grow the automotive loan market globally.
Market Segmentation
The automotive loan market is segmented on the basis of vehicle type, provider type, percentage of amount sanctioned, and tenure. Based on vehicle type, the market is divided into two-wheeler, passenger car, and commercial vehicle. Based on the provider type, the market is segmented into banks, NBFCs (non-banking financial companies, OEM (original equipment manufacturer), and others (fintech companies). Based percentage of amount sanctioned, the market is segmented into less than 25%, 25-50%, 51-75%, more than 75%. On the basis of tenure, the market is segmented into less than 3 years, 3-5 years, more than 5 years. On the basis of region, the market is divided into North America, Europe, Asia-Pacific, South America, and Middle East & Africa.
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Company Profiles
Ally Financial Inc.; Bank of American Corporation; Daimler Financial Services; Capital One Financial Corporation; Ford Motor Credit Company; GM Financial Inc.; Mitsubishi HC Capital UK PLC; General Motors Financial Company, Inc.; Toyota Financial Services; JPMorgan Chase & Co. are among the major players driving the growth of the global automotive loan market.
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Attribute |
Details |
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Base Year |
2022 |
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Historical Years |
2018 – 2021 |
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Estimated Year |
2023 |
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Forecast Period |
2024 – 2028 |
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Quantitative Units |
Revenue in USD Billion and CAGR for 2018-2022 and 2023-2028 |
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Report Coverage |
Revenue forecast, company share, competitive landscape, growth factors, and trends |
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Segments Covered |
· Vehicle Type · Provider Type · Percentage of Amount Sanctioned · Tenure · Region |
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Regional Scope |
North America, Europe, Asia-Pacific, Middle East & Africa, and South America |
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Country Scope |
United States, Canada, Mexico, Germany, France, United Kingdom, Italy, Spain, China, India, Japan, South Korea, Australia, Saudi Arabia, UAE, South Africa, Turkey, Brazil, Argentina, Colombia |
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Key Companies Profiled |
Ally Financial Inc.; Bank of American Corporation; Daimler Financial Services; Capital One Financial Corporation; Ford Motor Credit Company; GM Financial Inc.; Mitsubishi HC Capital UK PLC; General Motors Financial Company, Inc.; Toyota Financial Services; JPMorgan Chase & Co. |
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Customization Scope |
10% free report customization with purchase. Addition or alteration to country, regional & segment scope. |
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Pricing and Purchase Options |
Avail of customized purchase options to meet your exact research needs. Explore purchase options |
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Delivery Format |
PDF and Excel through Email (We can also provide the editable version of the report in PPT/pdf format on special request) |
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