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The global car loan market is experiencing significant growth due to various factors. One of the key drivers is the changing preference towards a modern lifestyle, which leads to the replacement of old cars with newer models that enhance the driving experience. This trend is particularly evident in metro cities, where car sales are booming. Additionally, the emergence of non-banking financial companies (NBFCs) offering low interest rates, zero down payment plans, and affordable EMIs has further fueled the demand for car loans worldwide.Speak directly to the analyst to clarify any post sales queries you may have.
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Car loans are provided by various financing institutions, including banks, NBFCs, OEMs, and fintech companies. Borrowers are required to repay the loan in Equated Monthly Installments (EMIs) over a specific tenure with a predetermined interest rate. According to a CNBC report in 2022, inflation has had an impact on household budgets, resulting in some Americans struggling to make their monthly car loan payments. In the United States, the sales of passenger cars reached approximately 3.3 million in 2022, with top-selling models including Ford F Series, Chevrolet Silverado, Toyota RAV4, and Toyota Camry. The average interest rate for new car loans increased to 5.2% in the third quarter of 2022, while the average rate for used car loans rose to 9.7%. This indicates a growing demand for car loans in the foreseeable future.
In 2021, Maruti introduced an online platform for car financing options, providing customers with convenient access to loan packages and financial partners through Maruti Suzuki Smart Finance. This platform streamlines the loan application process, allowing customers to complete paperwork and receive funds online. Consequently, customers can easily obtain car loans, driving the growth of the global car loan market.
The market is also fueled by the reduction in car loan interest rates offered by financial institutions. Banks, OEMs, and NBFCs are engaged in intense competition, resulting in competitive interest rates to attract customers. For example, Bank of Baroda announced a reduction in car loan interest rates from 7.25% to 7% per annum in 2022. Furthermore, the expansion of NBFCs into rural and non-metro areas has contributed to the market share growth of car loans. Lenders are now offering flexible loan tenures and competitive interest rates, making car ownership more accessible and expanding the car loan market.
Another factor driving market growth is the increasing demand for luxury cars worldwide. The presence of international car manufacturers such as Volkswagen, Mercedes, BMW, and Toyota has met the global consumer demand for luxury vehicles. Economic expansion and development in tier 2 and tier 3 cities in developing countries have further boosted the demand for luxury cars in these areas. This trend positively impacts the car loan market as consumers seek loans to finance their luxury car purchases. Rising disposable incomes also contribute to the demand for cars, with New Jersey leading the country in luxury vehicle ownership according to 2022 iSeeCars data. As a result, the demand for car loans to purchase luxury cars is expected to drive the car loan market during the forecast period.
The integration of new technologies into existing product lines has the potential to drive market growth. Car loan companies are strategically focusing on delivering value-added services to their customers by leveraging technologies such as artificial intelligence, business analytics, and blockchain. By expanding their current product and service offerings, these companies aim to enhance service quality and elevate customer satisfaction. Moreover, these technologies enable more precise structuring of new and used auto loans. The demand for car loans is increasing due to advancements in blockchain technology, improved telematics, the rise of online services, and the growing trend of digitalization. For instance, Kuwy, an automotive fintech platform in India, facilitates automated lending and streamlines loan processes by connecting people, vehicles, dealers, lenders, and OEMs through strategic industry alliances and exclusive solutions. This enables them to offer the best automotive loan options to their customers. Customers are also showing a preference for financiers that provide data-driven consulting services. Therefore, the application of new technologies to expand current products and services is expected to drive the demand for car loan providers in the forecast period.
Market Segmentation
The global car loan market is segmented based on car type, provider type, percentage of amount sanctioned, tenure, region and competitive landscape. 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 type, 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.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.Report Scope
In this report, the global car loan market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:Global Car Loan Market, by Car Type:
- Hatchback
- Sedan
- SUV (Sports Utility Car)
- MPV (Multi-Purpose Vehicle)
- Others
Global Car Loan Market, by Provider Type:
- Banks
- NBFCs (Non-Banking Financial Companies)
- OEM (Original Equipment Manufacturer)
- Others
Global Car Loan Market, by Percentage of Amount Sanctioned:
- Less than 25%
- 25-50%
- 51-75%
- More than 75%
Global Car Loan Market, by Tenure:
- Less than 3 Years
- 3-5 Years
- More than 5 Years
Global Car Loan Market, by Region:
- North America
- Europe
- Asia-Pacific
- Middle East & Africa
- South America
Competitive Landscape
Company Profiles: Detailed analysis of the major companies present in the global car loan market.Available Customizations
The following customization options are available for the report:- Detailed analysis and profiling of additional market players (up to five).
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Table of Contents
1. Introduction
2. Research Methodology
3. Executive Summary
4. Voice of Customer Analysis (B2C Model Analysis)
5. Global Car Loan Market Outlook
6. North America Car Loan Market Outlook
7. Europe Car Loan Market Outlook
8. Asia-Pacific Car Loan Market Outlook
9. Middle East & Africa Car Loan Market Outlook
10. South America Car Loan Market Outlook
11. Market Dynamics
12. Impact of COVID-19 on Global Car Loan Market
13. Market Trends & Developments
14. Porter’s Five Forces Model
15. SWOT Analysis
16. Competitive Landscape
17. Strategic Recommendations/Action Plan
18. About the Analyst & Disclaimer
Companies Mentioned
- 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.