Car Finance Market Report 2026

The car finance market size has grown strongly in recent years. It will grow from $321.46 billion in 2025 to $346.88 billion in 2026 at a compound annual growth rate (CAGR) of 7.9%. The growth in the historic period can be attributed to rising vehicle ownership levels, expansion of organized auto lending institutions, increasing availability of consumer credit, growth of dealership-based financing, rising preference for installment-based vehicle purchases.

The car finance market size is expected to see strong growth in the next few years. It will grow to $468.44 billion in 2030 at a compound annual growth rate (CAGR) of 7.8%. The growth in the forecast period can be attributed to increasing adoption of electric vehicle financing products, growing use of ai-driven credit assessment, expansion of digital-only finance providers, rising demand for subscription-based mobility models, increasing integration of finance offerings at point of sale. Major trends in the forecast period include increasing adoption of digital loan origination platforms, rising demand for flexible vehicle financing options, growing penetration of used car financing, expansion of embedded finance through oem channels, enhanced focus on risk-based pricing models.

The increase in vehicle prices is expected to drive the growth of the car finance market in the coming years. Rising vehicle prices are primarily influenced by higher costs of raw materials such as steel, aluminum, and rare earth metals used in vehicle manufacturing. In addition, broader inflationary pressures affect automotive production, transportation, and logistics expenses, further contributing to higher vehicle prices. Car finance plays a crucial role in supporting vehicle purchases amid rising prices by enabling consumers to spread costs over time through loan and leasing options. For example, in January 2023, according to JPMorgan, a US-based investment banking and financial services company, U.S. consumers spent an average of $46,437 on a new vehicle, reflecting a 4.2% year-over-year increase. Therefore, rising vehicle prices are contributing to the expansion of the car finance market.

Major companies operating in the car finance market are increasingly focused on developing innovative solutions, such as modern vehicle loan platforms designed for previously underserved borrowers, to address growing demand for inclusive and flexible auto financing. These solutions are driven by rising vehicle ownership, increasing demand from borrowers with non-prime credit profiles, and the need to reduce friction in loan origination processes. A modern vehicle loan platform for underserved borrowers refers to financing products tailored for customers who may not qualify as prime borrowers, using advanced underwriting methods, data analytics, and flexible credit criteria to expand access beyond traditional bank lending. For instance, in October 2025, Carputty Inc., a US-based fintech auto finance company, partnered with Westlake Financial Services Inc., a US-based auto finance provider, to launch Flexloan, a single-vehicle auto loan product serving prime, near-prime, and below-prime borrowers. The product offers flexible loan amounts ranging from US$8,500 to US$42,000, repayment terms between 24 and 72 months for new or used vehicles, and leverages Carputty’s proprietary data-driven V³ Valuation™ system to evaluate vehicle equity and loan suitability.

In June 2023, Mitsubishi UFJ Financial Group, a Japan-based financial services company, acquired Mandala Finance for an undisclosed amount. Through this acquisition, Mitsubishi UFJ Financial Group aimed to expand its footprint in Southeast Asia and strengthen its consumer finance capabilities by leveraging Mandala Finance’s local market expertise and established customer base. The deal supports the integration of Mandala Finance’s regional knowledge and distribution network with Mitsubishi UFJ Financial Group’s global financial resources and innovative service offerings. Mandala Finance is an Indonesia-based financial services company specializing in car finance solutions.

Major companies operating in the car finance market are Ford Motor Credit Company LLC, JPMorgan Chase Bank, Bank of America, Wells Fargo Auto, Volkswagen Financial Services AG, BNP Paribas S.A., Capital One Bank, PACCAR Financial Corp., The Bank of Nova Scotia (Scotiabank), General Motors Financial Company Inc., Ally Bank (Ally Financial), Fifth Third Bank, Citizens Financial Group Inc., Santander Consumer USA Holdings Inc., BBVA USA (BBVA), KeyBank National Association (KeyBank), Hyundai Motor Finance Company, Toyota Financial Services, American Honda Finance Corporation (Honda Financial Services), TD Auto Finance LLC, Chrysler Capital, Mercedes-Benz Financial Services USA LLC, Nissan Motor Acceptance Corporation (Nissan Motor Acceptance Company LLC), The Huntington National Bank (Huntington Financial), BMW Financial Services LLC.

North America was the largest region in the car finance market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the car finance market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the car finance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The car finance market includes revenues earned by entities through refinancing, personal contract purchases, dealer financing, extended warranties, and credit insurance. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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