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The automotive financing market size is forecast to increase by USD 17.6 billion at a CAGR of 3.52% between 2023 and 2028. The market is experiencing significant growth due to several key trends. One major trend is the rise in cab service financing, as ride-hailing companies continue to expand their fleets. Another trend is the increasing investment in autonomous vehicles, which is expected to revolutionize the automotive industry and create new financing opportunities. Additionally, the rise in ride-sharing services has led to a higher demand for flexible financing options for both personal and commercial vehicles. These trends are driving the growth of the market, offering significant opportunities for market participants.
The market is a significant segment of the broader automotive industry, encompassing the funding of new and used vehicle purchases, as well as leasing and commercial vehicle financing. Sales activities in this sector have been driven by technological advancements, including the emergence of electric vehicles and the increasing adoption of autonomous vehicles. Banks, credit unions, captive automotive financing companies, and digital platforms are key players in the market. The loan-to-value ratio, year-on-year growth, and demand shock are crucial factors influencing the market's dynamics. Technological advancements, such as artificial intelligence technology, blockchain, digital payments systems, and online/mobile banking, are transforming the automotive financing sector, providing more convenient and efficient financing solutions for consumers. Cryptocurrency is also gaining traction as a potential financing option, adding another layer of complexity to the market.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The used vehicle segment is estimated to witness significant growth during the forecast period. The global market is experiencing significant growth in the initial phase of the digital era, with online and mobile banking playing a pivotal role in the process. Car-sharing, ride-hailing, car rental, and aggregators such as Uber have revolutionized the industry, leading to increased demand for flexible financing solutions. OICA reports indicate that new loans for pickup trucks and light commercial vehicles in the used cars sales segment have seen a rise during the lockdown. Vehicle prices, vehicle categories, and loan buyers are key factors driving the adoption of online loan services through mobile/web-based platforms. The global automotive industry is witnessing intense competition among financial institutions, captive finance companies, and private counterparts, offering transparent financing processes to build trust with customers.
Furthermore, new vehicle segment financing and used vehicle segment financing have their unique challenges, with vehicle maintenance, insurance, and interest rates being critical considerations. Online sales portals and connected cars are further disrupting the market, offering convenience and flexibility to consumers. Overall, the market presents numerous business opportunities for stakeholders in the value chain.
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The used vehicle segment was valued at USD 44.30 billion in 2018 and showed a gradual increase during the forecast period.
APAC is estimated to contribute 67% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The global market is witnessing significant growth in the initial phase of the digital era, with the adoption of online and mobile banking solutions enabling faster loan approvals in minutes. The emergence of car-sharing, ride-hailing, and car rental services through aggregators like Uber and rental companies has created new business opportunities in the industry. In the used cars sales segment, the lockdown has led to an increase in online sales portals and the prices of vehicles in various categories, including Pickup trucks and light commercial vehicles. Financial institutions and captive finance companies are increasingly offering new loans through online and mobile-based platforms, providing transparent financing processes and competitive interest rates.
Furthermore, the legal buyer-lender relationship is strengthened through trust and private counterparts, ensuring vehicle maintenance and insurance coverage for new and used vehicles in the new vehicle segment and the used vehicle segment. Connected cars are also revolutionizing the industry by providing real-time data and insights, further enhancing the customer experience. Overall, the global automotive industry is embracing digitalization, offering immense potential for growth and innovation.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The rise in cab service financing is the key driver of the market. The autonomous cars market is witnessing significant growth due to the increasing demand for cab services. However, the financial constraints of potential drivers hinder their ability to purchase vehicles outright. In response, some automotive companies are introducing financing programs to offer flexible leasing and rental options for new cars.
Furthermore, these programs enable drivers to join cab services without the burden of car ownership. The geographical presence of these cab service providers is expanding, offering drivers worldwide the opportunity to earn a steady income through subscription-based models. These financing solutions provide an attractive alternative to traditional car purchasing methods, making it easier for drivers to enter the autonomous cab services market.
The increasing investment in autonomous vehicles is the upcoming trend in the market. The autonomous car market is witnessing significant growth as automotive companies and Original Equipment Manufacturers (OEMs) collaborate to design and develop self-driving vehicles using advanced technologies such as radio detection and ranging (RADAR), global positioning system (GPS), and Advanced Driver-Assistance Systems (ADAS).
Furthermore, autonomous cars, also known as unmanned vehicles, navigate without human intervention, making them a key trend in the automotive industry. Key players are leveraging their R&D capabilities to create successful prototypes and improve performance. The geographical presence of these companies is expanding as they seek to establish a strong foothold in the autonomous car market through various subscription-based models.
An increase in ride-sharing services is a key challenge affecting the market growth. The autonomous cars market is witnessing significant growth due to the increasing popularity of ride-sharing services. These services have gained traction in recent years as they offer numerous benefits, including reducing traffic congestion, saving money, and promoting environmental sustainability.
As a result, automotive companies are exploring subscription-based models to expand their geographical presence and cater to the growing demand for ride-sharing. Various strategic alliance allowed both companies to broaden their customer base and strengthen their market position. The trend of ride-sharing is expected to continue, with more vendors entering the market and forming alliances to meet the evolving needs of consumers.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Ally Financial Inc.: The company offers automotive financing such as Ally Auto vehicle protection.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market is a significant segment of the broader automotive industry, encompassing the financing of new and used vehicles through various channels. Sales activities in this sector involve car financiers, including banks, credit unions, and dealers, providing loans and leasing options to consumers for the purchase of passenger vehicles and commercial vehicles. Technological advancement in the automotive sector, such as the emergence of electric vehicles (EVs) and the rise of autonomous vehicles, is driving innovation in automotive financing. Consumer preference for digital payments systems and artificial intelligence technology is also influencing market trends. The use of blockchain technology and cryptocurrency in automotive finance is gaining traction.
Furthermore, the subscription business model and telematics are also transforming the sector. Year-on-year growth in the automotive finance market is expected, despite potential demand shocks from economic and geopolitical factors. Mergers & acquisitions are also shaping the competitive landscape, with players like CarNow, Cion Digital, Upstart, and others expanding their offerings. Monthly loan payments, loan-to-value ratios, and the role of auto finance services in funding the automotive industry are key considerations in this market.
Market Scope |
|
Report Coverage |
Details |
Page number |
174 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 3.52% |
Market growth 2024-2028 |
USD 17.6 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
3.22 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 67% |
Key countries |
China, US, Japan, Germany, and India |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Ally Financial Inc., Banco Santander SA, Bank of America Corp., Bayerische Motoren Werke AG, BNP Paribas SA, Capital One Financial Corp., Citigroup Inc., Deutsche Bank AG, Ford Motor Co., General Motors Co., HDFC Bank Ltd., HSBC Holdings Plc, Hyundai Motor Co., ICICI Bank Ltd., JPMorgan Chase and Co., Mercedes Benz Group AG, Nissan Motor Co. Ltd., Toyota Motor Corp., Volkswagen AG, and Wells Fargo and Co. |
Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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