India Car Loan Market Size, Share and Industry Analysis 2033

India Car Loan Market Size, Share, Trends and Forecast by Type, Car Type, Provider Type, Tenure, and Region, 2025-2033

Report Format: PDF+Excel | Report ID: SR112025A30817

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India Car Loan Market Overview:

The India car loan market size reached USD 38.7 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 72.9 Billion by 2033, exhibiting a growth rate (CAGR) of 7.30% during 2025-2033. Rising disposable incomes, growing middle-class aspirations, urbanization, and increased vehicle ownership are driving the market demand. Additionally, favorable interest rates, digital loan processing, attractive financing schemes, government initiatives, and the growing demand for electric vehicles further boost market growth.

Report Attribute	Key Statistics
Base Year	2024
Forecast Years	2025-2033
Historical Years	2019-2024
Market Size in 2024	USD 38.7 Billion
Market Forecast in 2033	USD 72.9 Billion
Market Growth Rate (2025-2033)	7.30%

India Car Loan Market Trends:

Digital Transformation in Loan Processing

India's car loan market is undergoing a rapid digital transformation, driven by growing internet penetration and mobile adoption. The surge in Unified Payments Interface (UPI) transactions, from 5.4 billion in FY 2018-19 to 83.8 billion in FY 2022-23, highlights widespread digital financial acceptance. Banks and NBFCs are leveraging artificial intelligence (AI), machine learning (ML), and digital know your customer (KYC) for auto-underwriting, streamlining loan approvals, and reducing turnaround times. Paper-based processes are being substituted with web platforms and mobile apps, providing speedier disbursals and more convenience. Real-time tracking of loans and equated monthly installment (EMI) calculators add to customer confidence. As digital-savvy millennials opt for digital transactions, digital car loans are the new choice. This change comes in line with India's thrust towards a cashless economy and higher financial inclusion, upholding transparency and ease of vehicle finance.

India Car Loan Market Size

Surge in Used Car Financing

The rising demand for used vehicles is driving a noticeable trend in used car financing across India. Affordability concerns, economic uncertainties, and improved reliability of pre-owned cars are pushing more consumers toward this segment. Financial institutions are increasingly offering tailored loan products for used cars with flexible repayment options and competitive interest rates. Further, the rise of used car organized dealerships and internet-based auto marketplaces has increased access to car evaluation as well as financing. Enhanced vehicle verification technologies and risk assessment methodologies have allowed lenders to lower default risks. With middle-class populations opting for affordable mobility solutions, used car loan portfolios are experiencing strong growth, playing an important role in the overall growth of the Indian car loan market.

Customized Loan Products and Flexible Repayment Options

The other upcoming trend in the Indian automobile loan space is the provisioning of differentiated loan products for a variety of customer segments. Lenders are offering customized solutions in terms of credit rating, income levels, and car choices. Flexible loan tenures, step-up EMI plans, zero down payment plans, and balloon payment schemes are gaining traction with customers, particularly first-time buyers and salaried customers. These innovations drive affordability and extend access to funding. Lenders are also moving toward partnering more closely with vehicle manufacturers and dealerships to sell bundled packages, promotional rates, and loyalty rewards. These individualized financial instruments not only borrow more customers, but they create long-term ties between lenders and customers, all of which propel the market competitiveness.

India Car Loan Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the region level for 2025-2033. Our report has categorized the market based on type, car type, provider type, and tenure.

Type Insights:

New Car
Used Car

The report has provided a detailed breakup and analysis of the market based on the type. This includes new car and used car.

Car Type Insights:

SUV
Hatchback
Sedan

A detailed breakup and analysis of the market based on the car type have also been provided in the report. This includes SUV, hatchback, and sedan.

Provider Type Insights:

OEM (Original Equipment Manufacturers)
Banks
NBFCs (Non Banking Financials Companies)

The report has provided a detailed breakup and analysis of the market based on the provider type. This includes OEM (original equipment manufacturers), banks, and NBFCS (non banking financials companies).

Tenure Insights:

Less Than 3 Years
3-5 Years
More Than 5 Years

A detailed breakup and analysis of the market based on the tenure have also been provided in the report. This includes less than 3 years, 3-5 years, and more than 5 years.

Regional Insights:

North India
South India
East India
West India

The report has also provided a comprehensive analysis of all the major regional markets, which include North, South, East, and West India.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

India Car Loan Market News:

In March 2025, Poonawalla Fincorp Ltd launched secured loans for both new and used commercial vehicles, targeting small, light, and heavy vehicle operators. Initially covering 68 locations across 12 states, the company plans to expand to 400 locations in 20 states using a hub-and-spoke model. Focused on Tier 2 and Tier 3 cities, the loans offer simplified documentation and flexible payments to support transportation and logistics sector growth across India.
In February 2025, CARS24 expanded its loan offerings through its platform LOANS24, which initially focused on used car financing. The platform will now provide new car financing, purchase financing, loans against cars, and top-up loans. The initiative, active through a pilot phase in recent weeks, aims to enhance CARS24’s financial services. CARS24 Financial Services Private Limited, a wholly-owned subsidiary established in 2019, is driving this broader financial services expansion.

India Car Loan Market Report Coverage:

Report Features	Details
Base Year of the Analysis	2024
Historical Period	2019-2024
Forecast Period	2025-2033
Units	Billion USD
Scope of the Report	Exploration of Historical Trends and Market Outlook, Industry Catalysts and Challenges, Segment-Wise Historical and Future Market Assessment: Type Car Type Provider Type Tenure Region
Types Covered	New Car, Used Car
Car Types Covered	SUV, Hatchback, Sedan
Provider Types Covered	OEM (Original Equipment Manufacturers), Banks, NBFCs (Non Banking Financials Companies)
Tenures Covered	Less Than 3 Years, 3-5 Years, More Than 5 Years
Regions Covered	North India, South India, East India, West India
Customization Scope	10% Free Customization
Post-Sale Analyst Support	10-12 Weeks
Delivery Format	PDF and Excel through Email (We can also provide the editable version of the report in PPT/Word format on special request)

Key Questions Answered in This Report:

How has the India car loan market performed so far and how will it perform in the coming years?
What is the breakup of the India car loan market on the basis of type?
What is the breakup of the India car loan market on the basis of car type?
What is the breakup of the India car loan market on the basis of provider type?
What is the breakup of the India car loan market on the basis of tenure?
What is the breakup of the India car loan market on the basis of region?
What are the various stages in the value chain of the India car loan market?
What are the key driving factors and challenges in the India car loan market?
What is the structure of the India car loan market and who are the key players?
What is the degree of competition in the India car loan market?

Key Benefits for Stakeholders:

IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the India car loan market from 2019-2033.
The research report provides the latest information on the market drivers, challenges, and opportunities in the India car loan market.
Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the India car loan industry and its attractiveness.
Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.

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