What Is The Market Size & Growth Rate Forecast for the Automotive Finance Market?
The automotive finance market has demonstrated robust growth in recent years. From a strong base of $290.06 billion in 2024, it is projected to expand to $314.36 billion in 2025, commanding a compound annual growth rate (CAGR) of 8.4%. This growth in the historic period is driven by factors such as evolving consumer demand, the evolution of lending practices, the introduction of leasing, economic conditions, and low interest rates.
Expected to continue its steady growth trajectory, the automotive finance market is expected to reach $440.55 billion in 2029, with a forecast period CAGR of 8.8%. Factors propelling this growth include flexible financing options, personalized financing solutions, risk management strategies, customer-centric experiences, and the advent of subscription-based models.
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What Is Driving The Automotive Finance Market Forward?
The rise in vehicle prices is a key factor driving the growth of the automotive finance market. Due to escalating vehicle prices, automotive financing, which aids in buying expensive cars with manageable down payments, is gaining traction. As an instance, data from the US-based vehicle valuation company Kelly Blue Book indicated a significant 13.5% increase in vehicle transaction costs, year over year, from May 2021 to May 2022. This surge in prices has ramped up the demand for automotive financing, boosting market growth.
Notable Segments In The Automotive Finance Market?
1) By Provider Type: Banks, OEMs (Original Equipment Manufacturers), Other Provider Types
2) By Finance Type: Direct Finance, Indirect Finance
3) By Vehicle Type: Passenger Vehicles, Commercial Vehicles, Other Vehicle Types
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Who Are The Major Players In The Automotive Finance Market?
Major players in the automotive finance market include Ally Financial Inc., The Bank of America Corporation, Capital One Financial Corporation, Chase Auto Finance, Daimler Financial Services India Private Limited, Ford Motor Credit Company, General Motors Financial Company Inc., Hitachi Capital Corporation, Toyota Financial Services, Volkswagen Financial Services, BNP Paribas, HDFC Bank Limited, Standard Bank Group Ltd., Banco Bradesco SA, Wells Fargo & Co., HSBC Holdings PLC, Oodle Car Finance Services Limited, Lendbuzz Inc., OTO Capital, Bajaj Finance Limited, Three Wheels United, Moneybarn Limited, Yixin Group Limited, Caribou Financial Inc., Euler Motors, Nissan Infiniti Finance, Honda Motor Co. Ltd., American Express Company, MX Technologies Inc.
What Are The Emerging Trends In The Automotive Finance Market?
Technological advancements are constantly emerging trends in the automotive finance market. Companies are focusing on innovating new technologies to sustain their market positions. In an example from September 2022, Kuwy, a subsidiary of Volkswagen Finance and India’s first automotive fintech startup, launched KUWY-LaaS, an AI-driven blockchain technology platform for online auto sales. This transparent tool provides comprehensive information to sellers, buyers, and lenders, enabling fast, paperless financing approval.
Which Region Is Expected To Show Rapid Growth In The Automotive Finance Market?
Europe was the largest region in the automotive finance market in 2024, however, Asia-Pacific is anticipated to be the fastest-growing region in the forthcoming years. The automotive finance market report covers regions Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, and Africa.
What Does The Automotive Finance Market Report 2025 Offer?
Automotive finance pertains to the financial support provided for purchasing a car with minimal initial payment. The loan from the lender is repaid over a scheduled timeframe in equal monthly instalments with an agreed interest rate. The Automotive Finance Market research report from The Business Research Company offers global market size, growth rate, regional shares, competitor analysis, detailed segments, trends, and opportunities.
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