Auto Loan Market Size (2024 - 2029)

Auto Loan Market Analysis

The auto loan market has a loan outstanding of USD 4.12 trillion in the current year and is poised to register a CAGR of more than 5% for the forecast period.

Automobile sales globally have observed a continuous increase over the years, increasing the number of vehicles purchased with a rise in rise in number of auto loans taken by people for financing them. Based on the duration, loan providers globally are increasing their rate of interest as long-term loans are associated with higher risk. With differences in the types of vehicles purchased between developed and developing countries, sales of auto loans category also vary. As developing countries such as India exist with a major share of two-wheelers in automobile sales, developed countries such as the United States exist with a major share of four vehicles (Light Truck) in their automobile sales. In terms of global motor vehicle sales, passenger cars have emerged with a share of more than 60%, and the remaining share is occupied by commercial vehicles. Post-COVID-19 price of passenger vehicles has almost stabilized, with commercial vehicles observing a price rise of 10-12%, resulting in a decline in their sales and their associated loan business.

The Auto loan market exists with a varied demand for its products, having intra-country differences. Loan providers are continuously emerging with new loan products for making the purchase of automobiles easy and more convenient. Among the Automobile loan providers, Banks, Captive finance, and credit unions exist with a major share of around 70%, with the rate of interest varying between 4% to 10% in different countries.

To promote the adoption of Electric vehicles, Auto loan providers are coming with low and long-term interest rates on these vehicle loans. Post-COVID-19, China, the United States, and India have emerged as the world's largest auto market, resulting in rising opportunities for Auto loan providers in the regions.

Auto Loan Industry Segmentation

An automobile loan allows a user to borrow money from a lender and use it to purchase different forms of vehicles, which include Passenger and commercial vehicles. The loan is paid back to the issuer in the form of installments over some time with an agreed amount of interest payment.

 The auto loan market is segmented by vehicle type (passenger vehicles, commercial vehicles), by ownership (new vehicles, used vehicles), by end-user (individual, enterprise), By loan provider (banks, OEMs, credit unions, and other loan providers) and by region (North America, Europe, Asia-Pacific, South America, the Middle East, and the Rest of the World). 

The report offers market sizes and forecasts for the auto loan market in value (USD) for all the above segments.