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Global Car Finance Market Research Report 2023

Global Car Finance Market Size By Distribution Channel (Banks, OEMs, Credit Unions, Others), Vehicle Age (New Vehicles, Used Vehicles), Application (Personal, Commercial), and Purpose (Loans, Lease) And Region Global Market Analysis and Forecast, 2023-2030

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Report ID: 59

Categories: Service Industry

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Summary TOC Segmentation Methodology

Global Car Finance Market Synopsis

The Global Car Finance Market size was reasonably estimated to be approximately USD 220000 Million in 2023 and is poised to generate revenue over USD 362270 Million by the end of 2030, projecting a CAGR of around 6.40% from 2023 to 2030.

Car Financial Markets includes various financial products such as loans & leases, which allow customers to obtain a car. Moreover, car finance products & services are primarily distributed through original equipment manufacturers (OEMs), banks, credit unions, brokers, and other financial institutions.

  • The primary goal of the car finance market is to make vehicle ownership and acquisition more accessible to a wider range of people. Many people cannot afford to purchase a vehicle outright, and the car finance market allows them to make payments over time, usually with interest, to pay off the cost of the vehicle.
  • The car finance market also serves the purpose of boosting car sales, which is beneficial to the automotive industry as a whole. By making vehicles more affordable to potential buyers, the car finance market increases demand for vehicles, which in turn drives sales for car manufacturers and dealerships
  • The car finance market is a significant component of the overall automotive industry and is essential in helping people purchase vehicles, especially in instances where they cannot pay the full amount upfront. The market size and growth of the car finance industry depend on several factors such as interest rates, economic conditions, consumer preferences, and regulatory policies.

Top Key Players Involved Are:

"Volkswagen Financial Services (Germany), Hitachi Capital (UK), Ally Financial (U.S), Axa Bank (Belgium), credit europe bank nv (Netherland), HSBC Holdings plc (UK), deutsche bank ag (Germany), Allianz (Germany), Bank of America (U.S), Capital One (U.S), Chase Auto Finance (U.S), Daimler Financial Services (Germany), Ford Motor Credit Company (U.S), GM Financial Inc (U.S), Toyota Financial Services (Japan), Arval Service Lease (France), Bayerische Motoren Werke AG (Germany), Central Contract S.O.T Ltd (UK), and Other Major Players."

Car Finance Market

The Global Car Finance Market Trend Analysis

Low- Interest Rates are a Significant Driver Of The Market

  • Low- Interest rates are a significant driver of the car finance market because they determine the cost of borrowing money to finance a vehicle purchase or lease. lower interest rates make borrowing more affordable, which can increase demand for car loans and leases.
  • When interest rates are low, car finance companies can offer more attractive financing options, such as low-interest loans or zero-percent financing deals, which can make it more affordable for consumers to purchase or lease a vehicle. This can lead to an increase in demand for cars and, in turn, boost sales for car manufacturers and dealerships.
  • Interest rates are also closely tied to the broader economy and monetary policy set by central banks. For example, when the economy is weak, central banks may lower interest rates to stimulate economic activity, which can lead to an increase in demand for car loans and leases
  • In Conclusion, interest rates are a significant driver of the car finance market because they impact the cost of borrowing money to finance a vehicle purchase or lease. Low-interest rates can increase demand and stimulate sales for car manufacturers and dealerships.

Digitalization Presents Several Opportunities to the Market

  • Digitalization can streamline the loan application process by allowing customers to apply for loans online. This can reduce the time and effort required for loan processing, making the process faster and more convenient for customers.
  • Digitalization can provide lenders with access to large amounts of data, which can be used to develop insights into customer behavior and preferences. Digitalization can improve risk management by providing lenders with better tools to assess credit risk and monitor borrower behavior.
  • In Conclusion, Digitalization presents significant opportunities for the car finance markets, including streamlined loan processing, enhanced customer experience, increased efficiency, data analytics, access to new markets, and improved risk management

Countrywise Car Production

                                                                                                                                                                                             Source: Statista      

According to the above graph, the growing global Car market drives the Car Finance Market. With the increase in Car production around the world, the demand for Car Finance Market is expected to rise further. More Car production is being initiated all over the country indicating that the Car Finance Market is expanding, as a result, the number of producers is increasing which increases the demand for the Car Finance Market.

Segmentation Analysis of The Car Finance Market

Global Car Finance market segments cover the Distribution channels, Vehicle age, Application, and Purpose. By Purpose, the Loans segment is Anticipated to Dominate the Market Over the Forecast period.

  • Loans make car ownership more affordable for many customers by allowing them to spread the cost of the vehicle over several years. This can make car ownership more accessible for a broader range of consumers. Loans offer a range of terms and options to suit different needs and budgets.
  • Over the long term, loans can be a more cost-effective financing option than leasing. While leasing may have lower monthly payments, it can be more expensive over the long run due to factors such as mileage limits, wear and tear fees, and other costs associated with the lease. Loans are offered by a range of lenders, including banks, credit unions, and car manufacturers. This makes them a more accessible financing option for many customers.
  • In Conclusion, the loan segment is dominant in the car finance markets due to its affordability, flexibility, ownership benefits, higher resale value, lower total cost, and accessibility.

Regional Analysis of The Global Car Finance Market

Europe is Expected to Dominate the Market Over the Forecast Period.

  • Europe dominated the automotive loan market with the largest share. This emerges from the dominance of companies offering financing services for automobiles. The region's strong advertising sector has raised people's awareness of automotive loan plans, which has increased demand for automotive loans in the region.
  • Europe is home to many of the world's leading car manufacturers, which has led to a wide range of car models being available in the market. This means that there is plenty of choice for consumers, and they can find a car that meets their needs and budget. The car finance market in Europe is regulated by various laws and regulations, which have helped to protect consumers and ensure that lenders operate fairly and responsibly.
  • In Conclusion, the combination of high demand for cars, established financial systems, a wide range of car manufacturers, and regulation has made Europe the dominating market for the car finance market.

Covid-19 Impact Analysis On 3D Printing Materials and Services Market

  • One of the most significant impacts of the pandemic on the car finance market is the decrease in demand for cars. With many people working from home and social distancing measures in place, fewer people are commuting or traveling. This has resulted in a decrease in car sales and, in turn, a decrease in the need for car financing.
  • Many lenders have become more cautious in their lending practices due to the uncertainty caused by the pandemic. This has resulted in tighter lending criteria, making it more difficult for some people to obtain car finance.
  • In Conclusion, the COVID-19 pandemic has had a mixed impact on the car finance market. While demand for cars has decreased, some lenders have responded by offering payment holidays and lowering interest rates to stimulate demand. However, the long-term impact of the pandemic on the industry remains uncertain.

Top Key Players Covered in the Car Finance Market

  • Volkswagen Financial Services (Germany)
  • Hitachi Capital (UK)
  • Ally Financial (U.S)
  • Axa Bank (Belgium)
  • credit europe bank nv (Netherland)
  • HSBC Holdings plc (UK)
  • deutsche bank ag (Germany)
  • Allianz (Germany)
  • Bank of America (U.S)
  • Capital One (U.S)
  • Chase Auto Finance (U.S)
  • Daimler Financial Services (Germany)
  • Ford Motor Credit Company (U.S)
  • GM Financial Inc (U.S)
  • Toyota Financial Services (Japan)
  • Arval Service Lease (France)
  • Bayerische Motoren Werke AG (Germany)
  • Central Contract S.O.T Ltd (UK), Other Major Players.

Key Industry Developments in the Car Finance Market

In April 2023, Maruti Suzuki partners with IDFC First Bank for personalized car finance. As part of the collaboration, the bank will offer personalized finance options across new car loans, pre-owned car loans, and commercial loans to customers planning to purchase Maruti Suzuki vehicles. This partnership further contributes to the Indian automaker’s strong network of leading banks and finance providers in the country.

In January 2023, Metro Bank enters the world of digital car loans by entering the vehicle financing market in the UK with the launch of a digital car loan product. Housed under the RateSetter brand, it is offering purchase loans for second-hand cars and the product is currently being piloted by Car Finance 247 and Motion Finance.

Global Car Finance Market

Base Year:

2022

Forecast Period:

2023-2030.

Historical Data:

2016-2022

Market Size in 2021:

USD 220000 Mn.

Forecast Period 2023-30 CAGR:

6.40%

Market Size in 2028:

USD 362270 Mn.

Segments Covered:

By Distribution Channel

  • Banks
  • OEMs
  • Credit Unions
  • Others

By Vehicle Age

  • New Vehicles
  • Used Vehicles

By Application

  • Personal
  • Commercial

By Purpose

  • Loans
  • Lease

By Region

  • North America (U.S., Canada, Mexico)
  • Europe (Germany, U.K., France, Italy, Russia, Spain, Rest of Europe)
  • Asia-Pacific (China, India, Japan, Singapore, Australia, New Zealand, Rest of APAC)
  • Middle East & Africa (Turkey, Saudi Arabia, Iran, UAE, Africa, Rest of MEA)
  • South America (Brazil, Argentina, Rest of SA)

Frequently Asked Questions

What would be the forecast period in the Global Car Finance Market research report?

The forecast period in the Car Finance Market research report is 2023-2030.

Who are the key players in Global Car Finance Market?

Volkswagen Financial Services (Germany), Hitachi Capital (UK), Ally Financial (U.S), Axa Bank (Belgium), credit europe bank nv (Netherland), HSBC Holdings plc (UK), deutsche bank ag (Germany), Allianz (Germany), Bank of America (U.S), Capital One (U.S), Chase Auto Finance (U.S), Daimler Financial Services (Germany), Ford Motor Credit Company (U.S), GM Financial Inc (U.S), Toyota Financial Services (Japan), Arval Service Lease (France), Bayerische Motoren Werke AG (Germany), Central Contract S.O.T Ltd (UK), Other Major Players.

What are the segments of the Global Car Finance Market?

The Global Car Finance Market is segmented into Types of Distribution Channels, vehicles age, Application Purpose, and Region. Types of Distribution Channels are categorized into Banks OEMs, Credit Unions, and Others. By Vehicle Age, the market is categorized into New Vehicles and Used Vehicles. By Application, the Market is Categorized into Personal and Commercial. By Purpose, the market is categorized into Loans and leases. By region, it is analyzed across North America (U.S.; Canada; Mexico), Europe (Germany; U.K.; France; Italy; Russia; Spain, etc.), Asia-Pacific (China; India; Japan; Southeast Asia, etc.), South America (Brazil; Argentina, etc.), Middle East & Africa (Saudi Arabia; South Africa, etc.).

What is the Global Car Finance Market?

Car Financial Markets includes various financial products such as loans & leases, which allow customers to obtain a car. Moreover, car finance products & services are primarily distributed through original equipment manufacturers (OEMs), banks, credit unions, brokers, and other financial institutions. The primary goal of the car finance market is to make vehicle ownership and acquisition more accessible to a wider range of people. Many people cannot afford to purchase a vehicle outright, and the car finance market allows them to make payments over time, usually with interest, to pay off the cost of the vehicle. This helps to spread the cost of vehicle ownership over a longer period, making it more affordable for those who may not have the financial means to pay for a vehicle upfront.

How big is the Global Car Finance Market?

The Global Car Finance Market size was reasonably estimated to be approximately USD 220000 Million in 2023 and is poised to generate revenue over USD 362270 Million by the end of 2030, projecting a CAGR of around 6.40% from 2023 to 2030.

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