What Does the Historical and Current Auto Finance Market Size Trend Indicate?
The auto finance market has seen considerable growth due to a variety of factors.
•The size of the auto finance market has been experiencing a swift expansion over the most recent years. Its growth is expected to continue from a market value of $2325.08 billion in 2024 to achieve a value of $2607.74 billion in 2025, predicting a compound annual growth rate (CAGR) of 12.2%.
The remarkable growth observed during the historic period is the result of expansion in consumer credit, the introduction of installment plans, increase in leasing options, establishment of credit scoring systems, and the evolution of the auto industry.
How Will the Auto Finance Market Size Evolve over the Forecast Period?
The auto finance market is expected to maintain its strong growth trajectory in upcoming years.
• The automobile finance industry is predicted to witness a significant expansion in the coming years, with projections estimating it to reach a value of $4008.79 billion in 2029, at a Compound Annual Growth Rate (CAGR) of 11.3%.
This anticipated surge during the forecast period can be ascribed to factors such as the rise in digitalization related to auto financing, the transition to electric and shared transportation, innovative financing methods, data protection initiatives, and the influence of economic trends. Some of the noteworthy trends likely to shape the forecast period are contact-free dealings, incentives for green financing, usage-based insurance and financing, and the application of blockchain technology in automobile financing.
Which Factors Are Boosting Growth In The Auto Finance Market?
The escalation in the prices of vehicles is playing a pivotal role in ensuring the advancement of the auto financing market. The term 'vehicle costs' pertains to the amount that a buyer pays to the dealer to purchase the vehicle. As the price of cars rise, so does the size and duration of loans, which makes larger loans appear more feasible and hence boosts the demand for superior car financing options. For example, data published by the U.S. Bureau of Labor Statistics, an American fact-finding agency dedicated to labor economics and statistics, demonstrated that the Consumer Price Index (CPI) of preowned car and truck values rose from 184.997 in March 2023 to 193.394 in April 2023. Further evidence can be found in a report by the International Energy Agency, a France-based independent governmental body, indicating that back in 2020, the expenditure on electric cars totalled $120 billion which marked a 50% rise from the previous year, amounting to a 41% sales increase and average costs escalated by 6%. Thus, these escalating costs of vehicles are the key driving factor behind the growth observed in the auto finance market.
What Key Areas Define The Segmentation Of The Global Auto Finance Market?
The auto finance market covered in this report is segmented –
1) By Finance: Direct, Indirect
2) By Vehicle Age: New Vehicles, Used Vehicles
3) By Loan Provider: Banks, Original Equipment Manufacturer (OEM), Credit Unions, Other Loan Providers
Subsegments:
1) By Direct: Bank Loans, Credit Unions, Captive Finance Companies
2) By Indirect: Dealership Financing, Third-Party Lenders, Retail Installment Contracts
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How Are Emerging Trends Reshaping The Dynamics Of The Auto Finance Market?
The primary trend gaining momentum in the auto finance market is product innovation. Major players in the auto finance market are introducing unique products or technologies to solidify their market place. For example, Solera Holdings LLC, a US-based company specializing in vehicle lifecycle management, introduced Solera Auto Finance in March 2022. This revolutionary financing solution for used cars provides swift, sufficient financing for both independent and franchised used car dealers as well as their customers. The finance platform seamlessly integrates with Solera's Dealer Management Systems (DMS), comprising Auto/Mate for franchised dealers and iDMS for independent dealers, offering an exciting new financing alternative. Utilizing Solera's recognized AI and data science skills, it manufactures a complex, intensely accurate financing tool. It boasts impressive benefits like drawing in new customers, offering a speedy, simplified solution, enhancing precision, minimizing friction and reducing expenses.
Who Are the Key Players in the Auto Finance Market?
Major companies operating in the auto finance market include:
• Ford Motor Credit Company LLC
• General Motors Financial Company Inc.
• JPMorgan Chase
• Bank of America Corporation
• Hitachi Capital Corp
• Santander Bank NA
• Wells Fargo & Co.
• HSBC Holdings PLC
• Volkswagen Finance Services
• Capital One Financial Corporation
• PNC Bank
• Westlake Financial
• HDFC Bank Limited
• Carvana Co
• Mahindra & Mahindra Financial Services Limited
• Ally Financial Inc.
• Toyota Financial Services
• Infiniti Financial Services
• Standard Bank Group Ltd.
• Huntington Bancshares Inc.
• Equifax Inc.
• LendingTree Inc.
• Exeter Finance Corp
• Honda Financial Services
• TD Auto Finance
• Autopay
• Mercedes-Benz Financial Services
• CarsDirect
• AutoFi
• Caribou Auto Refinancing
What Is The Most Dominant Region In The Auto Finance Market?
Asia-Pacific was the largest region in the auto Finance market in 2024 and is expected to be the fastest-growing region in the forecast period. The regions covered in the auto finance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
