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Automotive Finance Market: By Provider Type (Banks, OEMs, Other Financial Institutions), By Vehicle Type (Passenger Cars, Commercial Vehicles), By Finance Type (Direct, Indirect), By Purpose Type (Loan, Lease, Others), And Region - Global Analysis of Market Size, Share & Trends For 2021-2022 And Forecasts To 2032
Automotive finance simply means a loan taken for a vehicle, which the borrower gradually pays back. When a borrower obtains an auto loan, he consents to repay the loan amount plus interest and any associated costs within a predetermined time frame. A person may save a lot of money on interest and fees by shopping around and comparing loan options. When someone finances a vehicle, a financial institution loans him the cash he requires to purchase the vehicle. In exchange, the borrower gives the lender the money to borrow over a set number of months apart from paying interest and sometimes fees. Banks, credit unions, finance businesses, online lenders, and some vehicle dealerships are the common sources of car financing.
Automotive Finance Market to surpass USD 531.1 billion by 2032 from USD 251.6 billion in 2021 at a CAGR of 7.0% in the coming years, i.e., 2022-32. One of the key reasons anticipated to fuel the growth of the Automotive Finance Market is the rising global demand for electric automobiles. To improve offerings, some suppliers of automotive technology implement cryptocurrency-based payments. Hence, the Automotive Finance Market is anticipated to be driven by cryptocurrency's rising prominence in the sector.
Automotive Finance Market is categorized on the basis of Provider Type into Banks, OEMs, and Other Financial Institutions. The Bank segment dominated the Automotive Finance Market in the past years. Over the projected period, the OEMs segment is expected to see a higher CAGR and is currently the fastest-growing market sector. OEMs operate and manage captive finance companies as independent entities that lend and lease money to customers. To acquire more outstanding customer shares, OEMs make enticing offers including longer service terms, buyback offers, and low credit rates.
Automotive Finance Market is categorized on the basis of Purpose Type into Loan, Lease, and Others. Over the projected period, the lease segment is projected to expand the fastest. Leasing a car is a practical way to get a car without making major financial sacrifices. Customers who lease a car can do so for a certain number of months at a fixed monthly cost. Along with insurance, the lender is responsible for paying for vehicle upkeep. As a result, it significantly lowers the costs associated with after-purchase. Moreover, leasing makes it possible for clients to upgrade or change their cars without any fuss.
The online loan services technology has significantly disrupted this market to a great extent. The web- and mobile-based platforms make it simple to contrast, explore, and apply for loan services. The need for automobile finance services is being driven by rising vehicle prices. Although the market for car financing in industrialized nations is largely saturated, developing nations are expected to become the attractive target market for financing firms. Customers in developing nations, however, have more faith in banks than in financial institutions when it comes to such loans. As a result, the Automotive Finance Market will expand as a direct result of growing auto sales.
The Automobile Financing Market is using artificial intelligence technology more and more to streamline the approval process, analyze data, boost credit underwriting, and accurately anticipate whether an applicant will become overdue. A number of automotive artificial intelligence technology firms are working to create lending platforms that use AI. This program has financing capabilities that are AI-enabled, allowing lenders to enhance the consumer experience.
The market has a wide range of competitors, including captives, banks, OEMs, and financial institutions. Due to the intense competition, it is extremely difficult for these businesses to attract new clients while also raising operating and marketing costs. The two main elements need to succeed in this market are open financing procedures and lower interest rates. Since well-known players have already dominated this industry, new entrants are facing obstacles to strengthen their presence.
Company Overview, Business Strategy, Key Product Offerings, Financial Performance, Key Performance Indicators, Risk Analysis, Recent Development, Regional Presence, SWOT Analysis
Automotive Finance Market is segmented based on regional analysis into five major regions: North America, Latin America, Europe, Asia Pacific, and the Middle East and Africa. In 2021, the Automotive Finance Market was dominated by Europe, which also contributed significantly to worldwide revenue. The growth of the regional Automotive Finance Market can be ascribed to the region's abundance of automotive loan service providers.
During the projection period, the Asia Pacific regional market is anticipated to develop at the fastest rate. It is anticipated that the rising number of supportive government measures in nations like Japan, China, and India to support consumer interest and automotive sector growth would open up new growth prospects for the local market.
During the first quarter of 2020, the COVID-19 pandemic's outbreak had a negative effect on the automobile finance sector. Sales of pickup trucks and light commercial vehicles were particularly strong during the year. According to some estimates, as compared to 2019, the demand for both used and new vehicles decreased by 1-2% and 3-4%, respectively, in 2020.
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Report Attribute |
Details |
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Market Size Value in 2021 |
USD 251.6 billion |
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Revenue Forecast in 2032 |
USD 531.1 billion |
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Growth Rate |
CAGR of 7.0% from 2022 to 2032 |
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Base Year for Estimation |
2021 |
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Quantitative Units |
Revenue in USD billion and CAGR from 2022 to 2032 |
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Report Coverage |
Revenue forecast, company ranking, competitive landscape, growth factors, and trends |
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Segments Covered |
Provider Type, Vehicle Type, Finance Type, Purpose Type, and Region |
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Regional Scope |
North America, Europe, Asia Pacific, Latin America, Middle East & Africa (MEA) |
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Key Companies Profiled |
Wells Fargo, HSBC, Bank of America, Santander Group, HDFC Bank, Capital One, Volkswagen Financial Services, Ally Financial, GM Financial Inc., Ford Motor Credit Company, Toyota Financial Services, Honda Financial Services, Bajaj Auto Finance, Novuna, Chase Auto Finance, and Other Prominent Players. |
The Automotive Finance Market size was estimated at USD 251.6 billion in 2021 and is expected to reach USD 531.1 billion in 2032.
Automotive finance simply means a loan taken for a vehicle, which the borrower gradually pays back. When a borrower obtains an auto loan, he consents to repay the loan amount plus interest and any associated costs within a predetermined time frame.
The OEMs and Lease segments accounted for the larger share of the Automotive Finance Market.
Key players in the Automotive Finance Market are Wells Fargo, HSBC, Bank of America, Santander Group, HDFC Bank, Capital One, Volkswagen Financial Services, Ally Financial, GM Financial Inc., Ford Motor Credit Company, Toyota Financial Services, Honda Financial Services, Bajaj Auto Finance, Novuna, Chase Auto Finance, and Other Prominent Players.
The major drivers of the Automotive Finance Market are the rising global demand for electric automobiles and the rising prominence of cryptocurrency in the sector.
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