The auto loan market size is expected to grow from US$ 279.33 billion in 2023 to US$ 498.18 billion by 2031; it is anticipated to expand at a CAGR of 7.5% from 2023 to 2031. The automotive industry has observed exponential growth since its beginning. Consumers are looking at used cars more than ever before, and some are even choosing them over two-wheelers. This, in turn, is anticipated to drive the demand for auto load market growth during the forecast period.
Auto Loan Market Analysis
Ownership of cars, which used to be a status symbol long ago, has become a necessity in recent times. Thus, growing consumer preference for owning a vehicle and evading public transportation is also an important factor in the adoption of used cars across the globe. Increasing digitization and startups with novel business models are promoting the used car financing market. Digitization helps to store, retrieve, and retain data. Saving information in digital format reduces the capital resources required and decreases the problem of storing documents. The surge in digitization in auto loans is growing. Further, including digital loan documents and e-signatures gives an opportunity to gain an advantage in the auto loan market during the forecast period.
Auto Loan
Industry Overview
- Auto loans are secured loans where the automobile itself is used as a security. It is offered by lenders for used cars, new cars, and commercial vehicles. Auto loans are obtainable through credit unions, banks, and online lenders and need the vehicle to be used as security for the loan.
- An auto loan is a kind of financing that can make it possible to buy a vehicle, such as a truck or car, and pay it off over time. The auto loan market is expected to grow during the forecast period due to growing digitization in the insurance and finance industry.
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Auto loan Market: Strategic Insights
Market Size Value in US$ 279.33 billion in 2023 Market Size Value by US$ 498.18 billion by 2031 Growth rate CAGR of 7.5% from 2023 to 2031 Forecast Period 2023-2031 Base Year 2023
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Auto loan Market: Strategic Insights
| Market Size Value in | US$ 279.33 billion in 2023 |
| Market Size Value by | US$ 498.18 billion by 2031 |
| Growth rate | CAGR of 7.5% from 2023 to 2031 |
| Forecast Period | 2023-2031 |
| Base Year | 2023 |
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Auto Loan Market Driver
Increasing Digitization in the Auto Loan to Drive the Market Growth
- With digital touchpoints growing in the customer buying of a vehicle, digitization of vehicle financing is unavoidable. The digital transformation movement is sweeping across numerous industries, and the auto loan sector is no exception. Thus, with a shift to digital services, customers across all auto segments are selecting a hassle-free vehicle purchase journey.
- The appearance of online automotive finance applications and growing vehicle prices are driving the growth of the global auto loan market. In addition, the implementation of digital technologies for automotive financing positively influences the growth of the auto finance market. Automotive lenders all over the globe are digitizing the consumer experience using technologies like biometrics, e-signature, and identification document verification.
- With advanced document scanning technology, all documents can be digitalized, verified, and stored. Cloud-based platforms can also help numerous participants to access and act on the loan application in parallelly. Digital loan processing can also help eliminate several rounds of discussions and tedious paperwork, thereby democratizing the vehicle lending process. Real-time credit risk valuation of the loan request with information from open APIs and credit score analysis can substantially reduce fraud. Thus, the auto loan market is expected to be supported by the digitization in the insurance finance industry.
Auto Loan
Market Report Segmentation Analysis
- Based on financier, the auto loan market is segmented into banks, OEMs, credit unions, and other loan providers.
- The OEM segment held a significant auto loan market share in 2023. OEMs are observing the rise in demand for financing for used vehicles.
- Further, the bank's segment is expected to grow at the fastest rate during the forecast period as it provides better after-sales services.
Auto Loan
Market Regional Analysis
The scope of the auto loan market report is primarily divided into five regions - North America, Europe, Asia Pacific, Middle East & Africa, and South America. North America is observing rapid growth and is expected to hold a noteworthy auto loan market share in 2022. The market for used car financing in the Asia Pacific region is on the fragmented side. The presence of numerous unorganized and organized players has shaped such a market scenario. Also, the majority of auto manufacturers, apart from offering their financing, have tie-ups with financial institutions and banks to offer a broader choice for their customers.
Additionally, the surge in auto sales has also influenced vehicle financing volumes. As per data published by the Reserve Bank of India (RBI) data, vehicle advances of commercial banks grew 18% at the end of June 2022. The surge was seen more for passenger vehicles than commercial vehicles. Thus, the market in the Asia Pacific region is expected to grow during the forecast period.
Auto Loan
Market Report Scope
The "Auto loan Market Analysis" was carried out based on vehicle type, ownership, end-user, loan provider, and geography. In terms of vehicle type, the market is segmented into passenger vehicles and commercial vehicles. In terms of ownership, the market is segmented into new vehicles and used vehicles. In terms of end-users, the market is segmented into individuals and enterprises. In terms of vehicle loan providers, the market is segmented into banks, OEMs, credit unions, and other loan providers. Based on geography, the market is segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and South America.
Auto Loan
Market Leaders & Share Analysis
Insurance Auto Loan
Market Leaders & Share Analysis
Ally Financial, HDFC Bank, Chase, Wells Fargo, Capital One, Bank of America, ICICI Bank, Credit Agricole, Mashreq Bank, and Tata Capital. are among the prominent players profiled in the Auto loan market report. In addition, several other players have been studied and analyzed during the study to get a holistic view of the market and its ecosystem. The auto loan market forecast is estimated based on various secondary and primary research findings, such as key company publications, association data, and databases.
Auto Loan
Market News and Recent Developments
Companies adopt inorganic and organic strategies such as mergers and acquisitions in the auto loan market. A few recent key market developments are listed below:
- In August 2021, Tata Motors partnered with Sundaram Finance to provide exclusive offers to customers electing to purchase its variety of passenger cars. Under this partnership with TATA Motors, Sundaram Finance agreed to offer 6 years of loans on the novel 'Forever' range of cars, and with 100% financing, that would require a minimum down payment.
(Source: Tata Motors, Company Website)
- In November 2021, Mahindra & Mahindra Financial Service Limited launched the subscription and leasing business 'Quiklyz.' This venture is a novel digital platform for vehicle leasing and subscription. This platform allows customers to choose the car and provides flexibility.
(Source: Mahindra & Mahindra, Company Website)
- In July 2021, Maruti Suzuki Limited launched a digital platform that provides customers with end-to-end online car financing solutions.
(Source: Maruti Suzuki, Company Website)
- In May 2023, as part of the Dutton Group, Albert Automotive Holdings Pty Ltd is a wholesale and retail used car business. Sojitz Corporation, a pre-owned car dealer, acquired this business to expand its reach into both foreign and domestic markets.
(Source: Sojitz Corporation, Company Website)
Auto Loan
Market Report Coverage & Deliverables
The market report "Auto Loan Market Size and Forecast (2021–2031)" provides a detailed analysis of the market covering below areas-
- Market size & forecast at global, regional, and country levels for all the key market segments covered under the scope.
- Market dynamics such as drivers, restraints, and key opportunities.
- Key future trends.
- Detailed PEST & SWOT analysis
- Global and regional market analysis covering key market trends, key players, regulations, and recent market developments.
- Industry landscape and competition analysis covering market concentration, heat map analysis, key players, and recent developments.
- Detailed company profiles.
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Vehicle Type, Ownership, End-User, Loan Provider, and Geography
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
This text is related
to country scope.
Frequently Asked Questions
The key players holding majority shares in the global auto loan market are General Electrics, TomTec, Imaging Systems GMBH, Olympus Corporation, PLANMECA OY, and Ajile Light Industry.
The global auto loan market is expected to reach US$ 498.18 billion by 2031.
The global auto loan market was estimated to be US$ 279.33 billion in 2023 and is expected to grow at a CAGR of 7.5 % during the forecast period 2023 - 2031.
Digital advancements in the auto loan market to play a significant role in the global auto loan market in the coming years.
Increasing investments in the auto loan market and high adoption in the commercial sector are the major factors that propel the global auto loan market.
- Ally Financial
- HDFC Bank
- Chase
- Wells Fargo
- Capital One
- Bank of America
- ICICI Bank
- Credit Agricole
- Mashreq Bank
- Tata Capital
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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