Global Car Loan Industry Report 2023-2028: Tech-Driven Transformations to the Fore - How Car Loan Providers Adapt to the Digital Age

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Sep 21, 2023, 19:00 ET

DUBLIN, Sept. 21, 2023 /PRNewswire/ -- The "Car Loan Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028F" report has been added to ResearchAndMarkets.com's offering.

The global car loan market is expected to witness significant growth to 2028

One of the primary catalysts for change is the evolving preference for a contemporary lifestyle, which prompts the replacement of older vehicles with newer models, ultimately enhancing the overall driving experience. This transition is notably conspicuous in major metropolitan areas where automobile sales are witnessing a surge.

Moreover, the emergence of non-banking financial companies (NBFCs) offering enticing propositions like low-interest rates, zero down payment plans, and affordable Equated Monthly Installments (EMIs) has considerably bolstered the global demand for car loans.

Car loans are extended by diverse financial institutions encompassing banks, NBFCs, Original Equipment Manufacturers (OEMs), and fintech enterprises. Borrowers are obligated to reimburse the loan through structured EMIs over a predetermined period, accompanied by a fixed interest rate. According to a 2022 CNBC report, inflation has impacted household budgets, resulting in some American households grappling with their monthly car loan obligations.

In the United States, passenger car sales reached an estimated 3.3 million in 2022, with the most popular models including the Ford F Series, Chevrolet Silverado, Toyota RAV4, and Toyota Camry. The average interest rate for new car loans climbed to 5.2% during the third quarter of 2022, while used car loans averaged 9.7%. This indicates an escalating demand for car loans in the foreseeable future.

In 2021, Maruti introduced an online platform for car financing options, granting customers convenient access to loan packages and financial partners through Maruti Suzuki Smart Finance. This platform streamlines the loan application process, enabling customers to complete documentation and receive funds online. Consequently, customers can effortlessly secure car loans, thus propelling the expansion of the global car loan market.

The market is further stimulated by the reduction in car loan interest rates offered by financial institutions. Banks, OEMs, and NBFCs engage in rigorous competition, resulting in competitive interest rates aimed at attracting customers. For instance, Bank of Baroda announced a reduction in car loan interest rates from 7.25% to 7% per annum in 2022. Furthermore, the penetration of NBFCs into rural and non-metropolitan regions has contributed to the market share expansion of car loans. Lenders are now providing flexible loan tenures and competitive interest rates, rendering car ownership more attainable and expanding the car loan market.

Another pivotal factor propelling market growth is the escalating global demand for luxury automobiles. The presence of international automakers such as Volkswagen, Mercedes, BMW, and Toyota has effectively met the worldwide consumer appetite for luxury vehicles. Economic progress and urban development in tier 2 and tier 3 cities in emerging economies have further amplified the demand for luxury cars in these regions.

This surge notably benefits the car loan market as consumers seek financing solutions to acquire their luxury vehicles. Increasing disposable incomes also contribute to the desire for automobiles, with New Jersey leading the nation in luxury vehicle ownership, according to 2022 iSeeCars data. Consequently, the demand for car loans to facilitate luxury car acquisitions is projected to drive the car loan market in the forecast period.

The integration of novel technologies into existing product portfolios has the potential to galvanize market growth. Car loan providers are strategically focusing on delivering value-added services to their clientele by harnessing technologies such as artificial intelligence, business analytics, and blockchain. By expanding their current array of products and services, these companies aim to elevate service quality and enhance customer satisfaction.

Furthermore, these technologies enable more precise structuring of both new and used auto loans. The demand for car loans is surging due to advancements in blockchain technology, improved telematics, the ascent of online services, and the burgeoning trend of digitalization. For instance, Kuwy, an automotive fintech platform in India, facilitates automated lending and streamlines loan processes by interconnecting individuals, vehicles, dealers, lenders, and OEMs through strategic industry partnerships and specialized solutions.

This empowers them to offer the most optimal automotive loan alternatives to their clients. Customers are also displaying a preference for financiers that provide data-driven advisory services. Hence, the application of innovative technologies to augment existing products and services is anticipated to drive the demand for car loan providers in the forecast period.

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the global car loan market.

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.

Market Dynamics

Drivers

Emergence of NBFCs
Increasing Number of Car Buyers
Reduction in Car Loan Interest Rates

Market Trends & Developments

Increasing Consumer Aspiration of Car Ownership
Rise in Demand for International Car Brands
Increasing Number of Market Players
Incorporating New Technology into Current Product Lines
Digitalization of Financial Services

Challenges

High Competition
Rising Prices of Cars

Voice of Customer Analysis (B2C Model Analysis)

Sample Size Determination
Respondent Demographics
By Gender
By Age
By Occupation
Brand Awareness
Factors Influencing Loan Availing Decision
Challenges Faced

Impact of COVID-19 on Global Car Loan Market

Impact Assessment Model
Key Segments Impacted
Key Regions Impacted
Key Provider Type Impacted

Report Scope

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

For more information about this report visit https://www.researchandmarkets.com/r/8mjel0

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