Car Loan Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028, Segmented By Car Type [Hatchback, Sedan, SUV (Sports Utility Car), MPV (Multi-Purpose Vehicle), Others (Racing Cars, Specialty Cars, Etc.)], 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: January - 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 CustomizationCar Loan Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028, Segmented By Car Type [Hatchback, Sedan, SUV (Sports Utility Car), MPV (Multi-Purpose Vehicle), Others (Racing Cars, Specialty Cars, Etc.)], 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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The Car Loan Market is expected to reach USD 26.58 billion in 2025 and grow at a CAGR of 8.67% to reach USD 40.28 billion by 2030.
The car loan market is witnessing robust growth due to different factors, such as the changing preference towards modern lifestyle by replacing old cars with more modern models that will improve the driving experience, boosting car sales, particularly in the metro cities, particularly in the metro cities. Moreover, with the emergence of NBFCs (non-banking financial companies) that offer low interest rates, zero down payment financial plans, and low interest EMIs, more consumers are looking for car loans that will drive the car loan market across the globe in the forecast period.
A car loan is provided by various financing institutions which allows one to buy a car for individual use. 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. Additionally, car loan is primarily provided through banks, NBFCs (non-banking financial companies, OEM (original equipment manufacturer), and fintech companies over a specified tenure and interest rate.
According to CNBC (Consumer News and Business Channel) 2022 report, an increasing number of Americans with auto loans are having trouble making their monthly payments as a result of inflation's impact on their household budgets. The sales of passenger’s cars in United States is around 3.3 million in 2022. The bestselling models in November 2022 were Ford F Series, Chevrolet Silverado, Toyota RAV4, Toyota Camry, etc. According to TransUnion, the average interest rate for a new car loan increased to 5.2% in the third quarter of 2022, while the average rate for a used car loan increased to 9.7%. Therefore, the demand for car loan will continue to grow during the forecast period across the globe.
Additionally, in 2021, customers can now access Maruti's online platform for car financing options. Customers can select the best loan package and financial partner through Maruti Suzuki Smart Finance, as well as finish all loan-related paperwork and get money online. Thus, without any hassle, customers can get car loans through the online platform, which is anticipated to drive the car loan market across the globe.
Reduction in Car Loan Interest Rates Fuels the Market Growth
There are numerous institutions that offer car loans, including banks, OEMs, and non-bank financial institutions (NBFCs). Also, the increase in NBFCs (Non-Banking Financial Companies) has resulted in intense competition. To make people avail their car loan financial institutions are providing competitive interest rate. The drop-in car loan interest rate is making consumers to purchase a new car of their choice. For instance, Bank of Baroda in 2022, announced reduction in its car loan interest rates to 7% per annum from 7.25% earlier. Additionally, the expansion of NBFCs into rural and non-metro areas has contributed to an increase in the market share of car loans. Therefore, lenders are providing loan with competitive interest rate and flexible loan tenures, making owning a car easier which is expanding car loan market during the forecast period.
Rise in Demand for Luxury Cars Fueling the Market Growth
The expansion of international car manufacturers like Volkswagen, Mercedes, BMW, and Toyota is satiating consumer demand globally. The tier 2 and tier 3 cities in developing countries experienced economic expansion and development, which increased demand for luxury vehicles in these cities. This is expected to have a positive impact on the car loan market's growth as people will avail car loan to buy luxury cars due to the high price of luxury cars which will drive the car loan market globally. Additionally, a huge demand for cars is created by customers' due to rising disposable income. For instance, according to 2022, in United States New Jersey iSeeCars data, by percentage share of 27.9, New Jersey currently boasts the most luxury vehicles in the country. As a result, with the rising demand of luxury cars globally consumers are continuing to use loan & financing services to buy luxury cars which will boost the demand of car loan market during the forecasted period.
Incorporating New Technology into Current Product Lines Boost the Market Growth
Car loan companies are focusing on providing value-added services to their customers by implementing technologies like artificial intelligence, business analytics, and blockchain, they are extending their current product & service offerings, which is expected to help improve service quality and raise customer satisfaction. Additionally, these technologies enable companies to structure more precisely new and used auto loans. The need for car loans is growing as a result of advancements in blockchain technology, superior telematics, an increase in the usage of online services, and the emerging trend of digitalization. For instance, in India Kuwy, an automotive fintech platform, enables automated lending In order to increase loan borrowings and digital commerce. It analyzes and connects people & vehicles to dealers, lenders, OEMs through strategic industry alliances & exclusive solutions, in order to offer them the best automotive loan. Customers are also preferring financiers that offer data driven consulting services. Therefore, it is anticipated that expanding current products & services through the application of new technologies would increase the demand of car loan providers in the forecasted period.
Market Segmentation
The car loan market is segmented based on car type, provider type, percentage of amount sanctioned, tenure. The market is divided into the hatchback, sedan, SUV (sports utility car), MPV (multi-purpose vehicle), others (racing cars, specialty cars, etc.) based on car type. Based on the provider, the market is segmented into banks, NBFCs (non-banking financial companies, OEM (original equipment manufacturer), others (fintech companies). Based percentage of amount sanctioned the market is segmented into less than 25%, 25-50%, 51-75%, more than 75%. By tenure the market is segmented into less than 3 years, 3-5 years, more than 5 years.
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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 market players in the global platform that lead the market growth of the global car 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 |
· Car 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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