Automotive Finance Market Size Worth $521.19 Billion By 2032 | CAGR: 7.1%

The global automotive finance market size is expected to reach USD 521.19 billion by 2032 according to a new study by Polaris Market Research. The report “Automotive Finance Market Share, Size, Trends, Industry Analysis Report, By Type (Indirect, Direct); By Service Type (New Vehicles, Used Vehicles, Others); By Vehicle Type (Passenger Vehicles, Commercial Vehicles); By Purpose (Leasing, Loan, Others); By Provider; By Regions; Segment Forecast, 2024 - 2032” gives a detailed insight into current market dynamics and provides analysis on future market growth.

The increasing penetration of passenger vehicles, rising modernization of vehicles, and development of autonomous vehicles are some factors expected to drive the market growth during the forecast period. Governments across the world are collaborating with automotive lenders to promote the adoption of electric vehicles.

The lenders are adopting technologies such as data analytics, cloud computing, artificial intelligence, and machine learning to offer timely services to customers and improve the overall experience. Integration of these technologies enables lenders to expand business operations and offer personalized offers by analyzing external databases, internal data, credit bureaus, social media, and online searches.

The different types of automotive finance include indirect finance and direct finance. In 2019, the direct automotive finance segment accounted for the highest market share. However, the demand for indirect automotive finance is expected to increase during the forecast period. Indirect automotive finance is offered by the vehicle dealer through auto finance companies, local banks, and the auto manufacturer’s captive car fund company. Indirect automotive finance provides access to a wide network of lenders for consumers in varied credit situations.

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On the basis of service type, the market is segmented into new vehicles and used vehicles. Automotive loan for new vehicles includes longer tenure owing to lower risks and manufacturer guarantee. The higher price of new vehicles and reduced risk of new vehicles result in disbursal of the higher loan amount at a lower interest rate. The down payment and EMI payments for new vehicles are lower as compared to used vehicles.

On the basis of vehicle type, the market is segmented into passenger vehicles, commercial vehicles, and others. There has been significant demand for automotive finance from the commercial vehicles segment owing to the high cost associated with them. The rising need to increase efficiency and reduce maintenance costs of transportation of commercial goods has significantly increased the demand for commercial vehicles, supporting the growth of this segment. Special initiatives are taken by governments in the form of subsidies, and special schemes for users of commercial electric vehicles also supplement the growth of this segment.

The market is segmented into banks, OEMs, financial institutions, credit unions, and others based on providers. In 2019, the banks segment accounted for the highest market share owing to benefits such as long repayment tenure, low-interest rate, and quick disbursement. Banks across the works are collaborating with Governments to promote the adoption of electric vehicles.

Countries such as China, India, France, and the U.S. have introduced several incentives and subsidies to encourage the use of electric vehicles. Several banks such as Bank of America have demonstrated their support to acceptance of alternative fuel vehicles by joining the US Department of Energy’s Workplace Charging program.

On the basis of purpose, the market is segmented into leasing, loan, and others. In 2020, the loan segment dominated the global market. However, the demand for leasing is expected to increase during the forecast period. Automotive loan assists consumers in the purchase of a vehicle, while leasing involves payments allowing car possession for a pre-determined amount of time. Some benefits offered by leasing include lower monthly payments, reduced repair expenses, no loan approval, and easy return after the expiry of the lease term.

The demand from Asia Pacific is high owing to increase demand for passenger vehicles, rising disposable income, and modernization of vehicles. Growing concerns regarding air pollution and the increasing need for fuel-efficient vehicles have increased the number of electric cars in countries such as China, the U.S., India, and Japan, driving the growth of the market. The governments in the region have taken various initiatives in the form of subsidies and incentives to increase the acceptance of electric vehicles, thereby increasing the need for automotive finance.

Vendors in the global market are expanding their geographical presence and product portfolios to strengthen their presence. The developing nations of Asia Pacific would provide significant growth opportunities during the forecast period. Some of the major market participants in the global market include GM Financial Inc., Toyota Financial Services, Daimler Financial Services, Ford Motor, and Standard Bank Group Ltd.

Polaris Market research has segmented the automotive finance market report on the basis of type, service type, vehicle type, provider, purpose, and region:

Automotive Finance, Type Outlook (Revenue, USD Million, 2019 - 2032)

• Indirect
• Direct

Automotive Finance, Service Type Outlook (Revenue, USD Million, 2019 - 2032)

• New Vehicles
• Used Vehicles

Automotive Finance, Vehicle Type Outlook (Revenue, USD Million, 2019 - 2032)

• Passenger Vehicles
• Commercial Vehicles
• Others

Automotive Finance, Provider Outlook (Revenue, USD Million, 2019 - 2032)

• Banks
• OEMs
• Financial Institutions
• Credit Unions
• Others

Automotive Finance, Purpose Outlook (Revenue, USD Million, 2019 - 2032)

• Leasing
• Loan
• Others

Automotive Finance, Regional Outlook (Revenue, USD Million, 2019 - 2032)

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Netherlands
  • Austria
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Malaysia
  • Indonesia
• Latin America
  • Brazil
  • Mexico
  • Argentina
• Middle East & Africa
  • Saudi Arabia
  • South Africa
  • Israel
  • UAE