Analysis by Finance (Direct, and Indirect); by Provider {Original Equipment Manufacturers (OEMs), Banks, and Financial Institutions}; by Purpose (Loan, and Lease), and by Vehicle Type (Passenger Vehicles, and Commercial Vehicles) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2033
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The global automotive finance market is estimated to garner a revenue of ~USD 455 billion by the end of 2033 by growing at a CAGR of ~7% over the forecast period, i.e., 2023 – 2033. Further, the market generated a revenue of ~USD 265 billion in the year 2022. 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.
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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 market 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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Growing Demand for Automotive Loans – With the rising population, the demand for vehicles has also been increasing every year. As a result, more and more people are now opting for car loans to buy a new vehicle. Owing to the ease of opting for automotive finance with easy EMI options and digital approvals, the automotive finance market is expected to escalate in the forecasted period. For instance, it was found that in the United States, auto loans reached around USD 1 trillion in 2019, an increase of 6.5% over 2018.
Increasing Global Sales of Automobiles – International Organization of Motor Vehicle Manufacturers (OICA), released global sales of vehicle statistics which revealed that it rose to 56 million in 2021 from 53 million in 2020. Whereas, the global production of vehicles was calculated to be 57 million in 2021.
Rising Share of Financial Services – Latest statistics reveal that with global GDP touching ~ USD 96 trillion in 2021, financial services were found to comprise almost 24% of the world's economy 2021.
Upsurge in the Financing of Used Cars – A recent report stated that in the United States, nearly 55% of used cars on the country roads in 2019 were financed with a lease or a loan.
Increasing Number of Vehicles Being Financed – In the United Kingdom, the number of cars bought on finance in 2018 exceeded 2.2 million, a rise of about 2% from 2017.
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.
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 automotive finance 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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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.
The 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).
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Ans: Increasing sales of vehicles as well as a rising amount of automotive loans along with more and more vehicles being financed with a lease or a loan are some of the major factors anticipated to drive the growth of the market.
Ans: The market is anticipated to attain a CAGR of ~7% over the forecast period, i.e., 2023 – 2033.
Ans: High cost of operations, as well as fluctuating rate of interest, are some of the factors estimated to hamper the market growth.
Ans: The market in Europe is projected to hold the largest market share by the end of 2033 and provide more business opportunities in the future.
Ans: The major players in the market are Axis Auto Finance Inc., Bank of America Corporation, Genpact, General Motors LLC, PricewaterhouseCoopers LLP, Ally Financial Inc., Mitsubishi HC Capital UK PLC, and others.
Ans: The company profiles are selected based on the revenues generated from the product segment, geographical presence of the company which determine the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by finance, provider, purpose, vehicle type, and by region.
Ans: The passenger vehicles segment is anticipated to garner the largest market size by the end of 2033 and display significant growth opportunities.
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