Automotive Finance Market size is anticipated to reach USD 455 Billion by the end of 2033, growing at a CAGR of 7% during the forecast period, i.e., 2023-2033. In the year 2022, the industry size of automotive finance was USD 265 Billion. The growth of the market can primarily be attributed to the growing demand for vehicles by the burgeoning population. As automotive finance has allowed consumers to buy a car by borrowing a loan in case they don’t have the money, it is propelling the trend of adopting automotive financing worldwide to own a vehicle for convenience. For instance, as per statistics, more than 80% of new vehicles added to the road in the United States were financed with a lease or a loan in 2019.
Automotive finance has now become fast, convenient, flexible, and transparent. The process for obtaining a loan is simple, digital, and involves minimal documentation. Most of the giant automotive manufacturers have marked their presence in the loan market with the rising demand for vehicles. They provide loans to customers for in-house car models facilitating the buyers to purchase the vehicles at affordable costs. With the rising number of vehicles being financed as well as the average amount borrowed, the demand for automotive finance is on the rise amongst the auto finance service providers, which in turn, is expected to create massive revenue generation opportunities for the key players operating in the global automotive finance during the forecast period. According to a 2019 report, the average amount borrowed to buy a new vehicle was over USD 32,000, and that for the used-vehicle loan was ~USD 20,000.
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Base Year |
2022 |
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Forecast Year |
2023-2033 |
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CAGR |
~ 7% |
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Base Year Market Size (2022) |
~ USD 265 Billion |
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Forecast Year Market Size (2033) |
~ USD 455 Billion |
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Regional Scope |
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Vehicle Type (Passenger Vehicles, Commercial Vehicles)
The global automotive finance market is segmented and analyzed for demand and supply by vehicle type segment into passenger vehicles and commercial vehicles. Amongst these segments, the passenger vehicles segment is anticipated to garner the largest revenue by the end of 2033, backed by the growing demand for passenger vehicles along with the surge in the sale of passenger cars worldwide. For instance, it was found that the global sales of passenger cars reached approximately 63 million cars in 2020. The lucrative financing solutions offered by various financial institutions are expected to attract individuals for buying/lease a vehicle for themselves very conveniently. Hence, even customers with limited sources of income are showing interest in buying a passenger car for their daily commute. All these factors add up to bring profitable opportunities for market growth.On the other hand, the commercial vehicle segment is also attributed to garner a significant share by the end of the forecast period. As the costs of commercial vehicles are higher as compared to passenger cars, people use automotive finance to buy these vehicles for commercial use. Also, the advantage of vehicle changes or vehicle upgradation in the leasing of a commercial vehicle through automotive financing is expected to fuel the segment growth.
Provider {Original Equipment Manufacturers (OEMs)
The global automotive finance market is also segmented and analyzed for demand and supply by the provider into original equipment manufacturers (OEMs), banks, and financial institutions. Out of these three segments, the banks’ segment is expected to hold the largest share in the upcoming years. The major factors that are attributed to the segment growth are the hassle-free documentation process along with the high-reliability features. In addition, the rising adoption of digital automotive finance methods in the banking sector has eased the process and elevated the adoption rate. Additionally, the lower interest rate compared to other providers is also forecasted to create a positive outlook in the future.
Our in-depth analysis of the global market includes the following segments:
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By Finance |
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By Provider |
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By Purpose |
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By Vehicle Type |
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North American Market Forecast
The North America automotive finance market, amongst the market in all the other regions, is projected to hold the largest market share by the end of 2033. The presence of major automotive finance providers along with the increased production of vehicles in the region is the major factor that is projected to fuel the market growth. As per the statistics released by the International Organization of Motor Vehicles (OICA), vehicle production in the American region rose from around 15 million vehicles in 2020 to 16 million vehicles in 2021. At the same time, the increasing population in the region, in addition to the rapid introduction of advanced technologies and increased demand for electric vehicles, connected cars, and autonomous cars, is anticipated to foster the demand for automotive finance to purchase a vehicle in the upcoming years.
APAC Market Statistics
The automotive finance market in Asia Pacific is also expected to grow with a significant CAGR over the next few years, owing to the rapid expansion of the automotive industry in the region. Also, the other factors contributing to market growth are the favorable government policies for purchasing a car in economies such as India, Japan, and China, increasing disposable income leading to higher spending capacity, and rising Gross Domestic Product (GDP).
·Axis Auto Finance Inc.
Company Overview
Axis Auto Finance Inc.’s wholly owned subsidiary, Pivotal Capital Corp., secured an additional funding facility with Mitsubishi HC Capital Canada, Inc.
Bank of America Corporation announced that Lucid Group, Inc., in partnership with Bank of America, has launched Lucid Financial Services, an all-new digital platform that will provide Lucid Air consumers with an adaptable, quick, and convenient financing process, along with loan and lease purchase options.
Author Credits: Harshita Srivastava, Saima Khursheed
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