Market Size of India Used Car Financing Industry
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2019 - 2022 |
| CAGR | 11.00 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Second Hand Car Finance Market Analysis
The Indian used car financing market was valued at USD 7.95 Billion and is projected to grow at the value of USD 14.87 Billion at a CAGR of around 11% during the forecast period (2022-2027).
Major consumers across the country are facing financial issues due to the pandemic surge in the selling of newer cars. This is likely to witness major growth for the market. Rising consumer preference for owning a vehicle and avoiding public transportation is also a key factor for the used car market across the country. Ownership of cars, which used to be a status symbol long ago, has become a necessity in recent times. The automotive industry has witnessed exponential growth since its inception. Consumers are looking at used cars ever more than before, and some are even preferring them over two-wheelers.
Nowadays, the majority of customers opt to purchase an automobile, depending on some type of financial assistance. The current rate of financing for used cars is just around 13-15% and offers a tremendous opportunity for manufacturers as well as financial institutions alike. Currently, the used car industry is around 1.3 times the new car industry in India which is likely to create an opportunity for the market.
With BS-VI rolling out in the country from the year 2020 and subsequent mandates for necessary safety features, the cost of new cars is expected to grow up. Also, few manufacturers are phasing out their diesel portfolio, and consumers who prefer diesel cars for their durability and mileage figures are also looking toward the used car space. These factors are again expected to drive used car financing.
Second Hand Car Finance Industry Segmentation
Used cars have become quite popular in recent times. The India Used Car Financing Market covers the latest trends in the financing segment, demand for used cars, and major companies operating in the sector. India's Used Car Market is segmented by car type and by the financier.
Based on the car type, the market is segmented into hatchback, sedan, and utility vehicles. Based on the financier, the market is segmented into OEMs, Banks, and NBFCs. The report covers the market size in value (USD Billion) for all the above-mentioned segments.
| Car Type | |
| Hatchbacks | |
| Sedans | |
| Sports Utility Vehicle | |
| Multi-purpose Vehicle |
| Financier | |
| OEMs | |
| Banks | |
| NBFCs |
India Used Car Financing Market Size Summary
The used car financing market in India is experiencing significant growth, driven by a shift in consumer preferences towards vehicle ownership over public transportation and the rising costs of new cars due to regulatory changes like BS-VI. The pandemic has further accelerated this trend, as financial constraints have led more consumers to consider used cars as a viable option. The market is characterized by a robust demand for financial assistance, with a substantial portion of used car purchases being financed through loans. This presents a lucrative opportunity for both automotive manufacturers and financial institutions to expand their offerings and capture a larger market share. The presence of major OEMs and the increasing involvement of luxury car makers in the used car segment are also contributing to the market's expansion.
The landscape of used car financing in India is becoming increasingly digitized, with startups and established players leveraging technology to streamline the financing process. Digital platforms offering end-to-end solutions, including e-signatures and digital loan documents, are gaining traction, making it easier for consumers to access financing options. The market is fragmented, with numerous organized and unorganized players, but the ease of obtaining loans from Non-Banking Financial Companies (NBFCs) is tilting the balance in their favor. Partnerships between auto manufacturers and financial institutions are further enhancing the availability of financing options, while initiatives like vehicle leasing and subscription services are introducing new business models to the market.
India Used Car Financing Market Size - Table of Contents
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1. MARKET DYNAMICS
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1.1 Market Drivers
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1.2 Market Restraints
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1.3 Industry Attractiveness - Porter's Five Forces Analysis
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1.3.1 Threat of New Entrants
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1.3.2 Bargaining Power of Buyers/Consumers
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1.3.3 Bargaining Power of Suppliers
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1.3.4 Threat of Substitute Products
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1.3.5 Intensity of Competitive Rivalry
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2. MARKET SEGMENTATION
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2.1 Car Type
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2.1.1 Hatchbacks
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2.1.2 Sedans
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2.1.3 Sports Utility Vehicle
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2.1.4 Multi-purpose Vehicle
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2.2 Financier
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2.2.1 OEMs
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2.2.2 Banks
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2.2.3 NBFCs
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India Used Car Financing Market Size FAQs
What is the current India Used Car Financing Market size?
The India Used Car Financing Market is projected to register a CAGR of 11% during the forecast period (2024-2029)
Who are the key players in India Used Car Financing Market?
Sundaram Finance Ltd., TSM Cars, Toyota Trust, CHOLAMANDALAM and Mahnidra Finance are the major companies operating in the India Used Car Financing Market.
