Car Finance Market Report 2024

The car finance market size has grown strongly in recent years. It will grow from $276.55 billion in 2023 to $298.38 billion in 2024 at a compound annual growth rate (CAGR) of 7.9%. The growth during the historic period can be attributed to factors such as regulatory changes, economic conditions, increased vehicle affordability, shifts in preferences towards vehicle ownership, and rising urbanization.

The car finance market size is expected to see strong growth in the next few years. It will grow to $406.25 billion in 2028 at a compound annual growth rate (CAGR) of 8%. The growth during the forecast period can be attributed to shifts in consumer preferences, environmental regulations, demographic trends, global economic conditions, and the adoption of electric vehicles. Major trends expected during this period include digital transformation, the integration of AI, the use of digital platforms, the application of machine learning, and the development of personalized financing solutions.

The rise in vehicle prices is anticipated to drive growth in the car finance market. The increase in vehicle prices is influenced by the costs of raw materials such as steel, aluminum, and rare earth metals used in vehicle production. Additionally, general inflation impacts the cost of goods and services, including those related to automotive manufacturing and logistics, leading to higher vehicle prices. Car finance helps consumers manage these rising costs by allowing them to spread payments over time through loans or leasing options. For instance, JP Morgan reported in January 2023 that U.S. consumers spent an average of $46,437 on new automobiles, a 4.2% increase from the previous year. Thus, higher vehicle prices are expected to drive the growth of the car finance market.

Leading companies in the car finance market are increasingly adopting online and digital platforms to streamline the loan application process and enhance customer experience. Online car finance platforms provide a digital interface for consumers to apply for and manage car loans or leases, making the financing process more efficient. For example, in March 2022, MG Motor India, in collaboration with ICICI Bank, HDFC Bank, Kotak Mahindra Prime, and Axis Bank, launched MG e-Pay, an online car finance platform. This service allows customers to easily obtain flexible and transparent loan approvals from home. The process involves selecting a car and dealership, completing a booking form, making an initial payment, and applying for a pre-approved loan online. Once the loan is approved, customers finalize the down payment, and the loan is disbursed to the dealership, facilitating a smooth vehicle delivery to their home.

In June 2023, Mitsubishi UFJ Financial Group, a Japan-based financial services company, acquired Mandala Finance for an undisclosed amount. This acquisition aims to strengthen Mitsubishi UFJ Financial Group's presence in Southeast Asia and enhance its consumer finance capabilities by integrating Mandala Finance's local expertise and customer base with Mitsubishi UFJ Financial Group's global financial strength and innovative services. Mandala Finance, based in Indonesia, specializes in car finance.

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 2023. 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, 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, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Car finance encompasses methods and options for funding the purchase or lease of a vehicle, including auto loans, leasing, and dealer financing. It includes various arrangements such as personal loans, hire purchase, and secured loans, each with its own terms and conditions.

The main types of car finance are loans, leases, and other options. Car loans involve a lender providing funds to a borrower for buying a vehicle, which is then repaid with interest over a set period, typically through monthly installments. Vehicles can be categorized as new or used. Distribution channels for car finance include banks, original equipment manufacturers (OEMs), credit unions, and other entities. Car finance applications are available for both personal and commercial use.

The car finance market research report is one of a series of new reports that provides car finance market statistics, including car finance industry global market size, regional shares, competitors with an car finance market share, detailed car finance market segments, market trends and opportunities, and any further data you may need to thrive in the car finance industry. This car finance market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

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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