India Car Loan Market toGrow at CAGR of over 8% till FY2026
High vehicle replacement and demand for vehicles, continuous changes in vehicle technologies, combined with rising disposable income and growing consumer spending on lifestyle products to drive India car loan market.
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According to TechSci report, “India Car Loan Market, By Type (New Car & Used Car), By Car Type (SUV; Hatchback; & Sedan), By Source (OEM; Bank; & Non-Banking Financial Company (NBFC)), By Percentage of Amount Sanctioned (Upto 25%; 25-50%; 51-75%; Above 75%), By Type of City (Tier 1; Tier 2; Tier 3; & Tier 4), By Tenure (Less than 3 Year; 3-5 Year; Greater than 5 Year),Competition, Forecast & Opportunities, FY2026” India car loan market is projected to grow at a CAGR of over 8% in value terms and to reach around USD 60 billion by FY2026. With lower interest rates, rising vehicle ownership, increasing disposable income, the market has witnessed the increasing demand for car loan in the country. In addition, the change from combustion engine vehicles to electric vehicles, new vehicle launches, government incentives for the purchase of electric vehicles, and the high replacement rate for vehicles are encouraging car sales across India, which is consequently driving the car loan market in the country as well.
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"India Car Loan Market"
Based on the vehicle type, the market can be segmented into SUVs, hatchbacks, and sedans in terms of vehicle type. The hatchback is the country's dominant model of vehicle, holding a majority share of around 50 percent in the Indian car loan industry, and the trend is likely to continue in the country. This is due to the advantages it offers, like riding comfort, safety, budget, lower noise and vibration when compared with other counterparts in the same segment. During the forecast period, the north region is projected to rise at the fastest pace than other regions. The government of India has reduced GST from 12 percent to 5 percent on the purchase of electric vehicles to encourage the adoption of electric vehicles and the government is also providing USD 0.021 tax exemption on loans taken on the purchase of electric vehicles, thereby driving the demand for car loans in the country. Based on type, demand for new car loan has increased in the past few years and the trend is likely to continue in the upcoming years.
“The increasing demand for innovation and new technologies in India car industry is expected to bring significant growth opportunities for the India car loan market. During the forecast period, both the governments, i.e.,central and state authorities have come up with measures to help soften the impact of COVID-19 on India’s auto industry. There is a plan to extend subsidies for new energy vehicles until 2022, and such vehicles will remain exempted from taxes, and this willhelp in boosting the India car loan market during the projected period,” said Mr. Karan Chechi, Research Director with TechSci Research, a research-based global management consulting firm.
According to TechSci report““India Car Loan Market, By Type (New Car & Used Car), By Car Type (SUV; Hatchback; & Sedan), By Source (OEM; Bank; & Non-Banking Financial Company (NBFC)), By Percentage of Amount Sanctioned (Upto 25%; 25-50%; 51-75%; Above 75%), By Type of City (Tier 1; Tier 2; Tier 3; & Tier 4), By Tenure (Less than 3 Year; 3-5 Year; Greater than 5 Year),Competition, Forecast & Opportunities,2026” has evaluated the future growth potential of India car loan market and provides statistics & information on market size, structure and future market growth. The report intends to provide cutting-edge market intelligence and help decision makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in the India car loan market.