The global car finance market size was US$ 241.5 billion in 2021. The global car finance market is forecast to grow to US$ 461.5 billion by 2030 by registering a compound annual growth rate (CAGR) of 6.5% during the forecast period from 2022 to 2030.
Car financing is the process of providing funds to customers to purchase cars. These services are generally offered by financing companies or specialized car manufacturers. When a bank or other financial institution offers automobile financing, it enables the buyer to pay the seller even when they don’t have the cash on hand or bank. In simple words, car financing enables the buyer to buy a car by borrowing the money to pay the seller.
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COVID-19 Impact Analysis
The COVID-19 pandemic has significantly halted the growth of the automobile sector as various industry players witnessed a steep decline in the demand for vehicles. Moreover, automotive manufacturers also cut down their operations in order to decrease further losses. Thus, it also affected the car finance market.
Regional Analysis
Due to the growing concentration of companies offering automotive financial services, Europe continues to have a significant portion of the worldwide auto loan market. The Asia-Pacific car financing market will also record significant growth. The growth of this regional market is attributed to the rising government initiatives to maintain consumer interest and foster growth in the auto sector. In addition, the growing number of automobile dealerships and second-hand car retailers will also benefit the car finance market during the study period.
Factors Influencing the Market
The global car finance market is primarily driven by the growing technological advancements. In addition, other factors like growing investments in autonomous vehicles and rising financing options from dealers, banks, and credit unions will boost the growth of the global car finance market during the study period.
Th growing range of cost-effective cab services and favourable discounts and leases will also benefit the car finance market during the analysis period. The market may also witness growth opportunities during the forecast period due to the growing range of R&D activities.
Autonomous vehicles are gaining significant traction due to the safety and convenience it provides. As a result, the market for car finance will grow inevitably. Apart from that, growing consumer disposable income and rising demand for luxury vehicles will benefit the overall car finance market during the study period.
Competitors in the Market
• Toyota Motor Credit
• Ford Motor Credit
• BNP Paribas
• HSBC
• Capital One
• Ally Financial
• Standard Bank
• Hitachi Capital Asia Pacific
• Fiat Finance
• Suzuki Finance
• Other Prominent Players
The report furnishes an intricate comprehension of each segment, delivering potential estimations for principal applications and insights into emerging prospects. Every regional market is meticulously scrutinized to ascertain its potential for growth, development, and demand in the forthcoming years.
As of the end of 2022, the Car Finance industry experienced notable growth in its workforce. Starting in January, employment within the Car Finance sector exceeded its pre-COVID levels, resulting in an expansion of payrolls by over 15,000 employees throughout the course of the year. The global Car Finance output demonstrated a remarkable increase of 5.2% during 2021, primarily attributed to a widespread economic upswing and a surge in demand for commodities. However, the momentum shifted in 2022, with the global industrial sector’s production contracting. This reversal followed a robust expansion in 2021, fueled by altered consumer spending patterns and substantial fiscal support.
Forecasts indicate that the global Car Finance output is set to rise by approximately 2.9% in 2023. This projection is underpinned by the gradual recovery of production in Western Europe from its previous troughs, as well as a rebound in output across the Asia/Pacific region. Maintaining its dominant position, China, accounting for nearly 45% of the global Car Finance market, remains both its largest producer and consumer. Remarkably, China’s market share has surged since 2010, when it stood at around 26%. This ascent has led to a substantial contribution to the nation’s GDP. Notably excelling as a top exporter, China leads in various sectors, including silicon, PVC, and several specific segments of the Car Finance market.
Market Segmentation
The global car finance market segmentation focuses on Service Provider, Purpose, Finance Type, Application, Service, and Region.
By Service Provider
• OEMs
• Banks
• Other financial institutions
By Purpose
• Loan
• Lease
• Others
By Finance Type
• Direct
• Indirect
By Application
• Commercial Use
• Residential Use
• Others
By Service Type
• Used Vehicles
• New Vehicles
By Region
● North America
o The U.S.
o Canada
o Mexico
● Europe
Western Europe
o The UK
o Germany
o France
o Italy
o Spain
o Rest of Western Europe
Eastern Europe
o Poland
o Russia
o Rest of Eastern Europe
● Asia Pacific
o China
o India
o Japan
o Australia & New Zealand
o ASEAN
o Rest of Asia Pacific
● Middle East & Africa (MEA)
o UAE
o Saudi Arabia
o South Africa
o Rest of MEA
● South America
o Brazil
o Argentina
o Rest of South America
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