Europe to Dominate the Global Automotive Loan Market During the Forecast Period
Growing penetration of captive automotive finance,
availability of loan benefits by governments for electric vehicles, rising digitalization
in automotive loan are the leading factors driving the Automotive Loan Market
during the projected period.
According to TechSci Research report, “Automotive Loan Market– Global
Industry Size, Share, Trends, Competition, Opportunity, and Forecast, 2018-2028F”. The global automotive loan market is expected to grow faster
during the forecast period as people prefer car to commute as a convenient
method in most of the places. Digital
lending services are one of the most innovative technologies that are currently
gaining popularity in the market for automotive loans, introduction of
progressive technology, such as electric automobiles, connected cars, and
driverless cars, will promote automotive loan market expansion.
A commercial vehicle loan is
a particular kind of loan that enables both private buyers and companies to buy
commercial vehicles. Despite being similar, a car loan is exclusively meant for
personal vehicles. Loans
for commercial vehicles are typically used to pay for the purchase of
automobiles for business use. There is different criteria for availing loans
for different vehicles and the loan will only sanctioned when a borrower meets
the given criteria of the financier.
Additionally, to effectively
support automated decisions, many automotive loan companies are upgrading
their LOS (Loan Origination Software) systems. Lenders benefit from quicker response and processing times
with using LOS systems. Additionally,
financier can quickly approve or reject online applications owing to automated
decision-making and loan structure.
One of the main factors
fueling the expansion of the automotive loan market is the rising demand
for automotive refinancing on a global level which offer lower interest rate on
existing loan of an individual. Refinancing
is becoming more popular as a result of its advantages, which include lower
monthly auto payments, lower interest rates, and shorter loan terms. For
instance, a fintech company named Rate Genius presented figures showing that
16.0% more Americans applied to refinance their vehicle loans in 2020.
According to the report from
digital lending company, the third-largest debt sector, after mortgages and
student loans, is auto loans. American vehicle loan debt totals USD1.46
trillion, or 9.4% of all consumer debt in the county. Americans take more than $60 billion in
new auto loans each month on average. Americans under the age of 50 take $37.9
billion in monthly auto loans, compared to those over age of 50 who take
$21.0 billion auto loan. Most
retail auto finance is provided by borrowers with ideal credit scores.
Based on the financier, the
banks' segment is anticipated to have significant expansion during the forecast
period, as banks
provide secure credit to their consumers. Customers have the option to apply
for preapproval through banks as well. The
ability to compare predicted loan offers is helpful for customers. Previously, banks would only finance
between 70 and 80% of the total cost of the vehicles. However, the banks
are now providing 100% financing for the vehicle.
Over the projected period,
the OEMs category is anticipated to grow at the fastest rate, due to the better
after-sales services which include availability of similar vehicle parts,
including those from the financed vehicle, for repair or replacement. Additionally, OEMs are seen as the
drivers of new business models and the future of mobility. Additionally, OEMs
are focusing on providing automotive loan through their captive financing
firms in addition to their other products and services.
Based on region, Europe
dominated the automotive loan market with the largest share. This emerges from
the dominance of companies offering financing services for automotives.
Additionally, the region's strong advertising sector has raised people's
awareness of automotive loan plans, which has increased demand for automotive loan
in the region.
Browse over XX market data
Figures spread through XX pages and an in-depth TOC on "Global Automotive Loan Market".
The automotive
loan market is segmented on the basis of vehicle type, provider type,
percentage of amount sanctioned, and tenure. On the basis of vehicle type, the market
is divided into the two-wheeler, passenger car, and commercial
vehicle. On the basis of provider,
the market is segmented into banks, NBFCs (non-banking financial services, OEM
(original equipment manufacturer), and others (fintech companies). Based on percentage
of amount sanctioned, the market is segmented into less than 25%, 25-50%,
51-75%, and more than 75%. On the basis of tenure, the market is segmented into
less than 3 years, 3-5 years, and more than 5 years. On the basis of region, the
market is divided into North America, Europe, Asia-Pacific, South America, and
Middle East & Africa.
Key market players in the global automotive
loan market include:
- Ally Financial Inc.
- Bank of American Corporation
- Daimler Financial Services
- Capital One Financial Corporation
- Ford Motor Credit Company
- GM Financial Inc.
- Mitsubishi HC Capital UK PLC
- General Motors Financial Company, Inc.
- Toyota Financial Services
- JPMorgan Chase & Co.
Various international and
domestic companies are trying to enhance their market reach by increasing their
merger and acquisition. For instance, in 2020 the two biggest leasing
companies of Japan, Mitsubishi UFJ Lease & Finance and Hitachi
Capital, declared their merger by April 2021. To increase their market
share, Hitachi Capital, and Mitsubishi UFJ Lease & Finance plan to broaden
their operations globally.
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“The rising demand for new
vehicles and used vehicles witnessed the significant growth in the emerging
economies across the globe. Owing
to the rising vehicle prices, vehicle buyers are opting for monthly loan
payments which is driving the automotive loan market. Additionally, with the
emergence of newbanking financial companies which are providing minimum zero
down payment loan schemes with low interest rate and EMIs are enticing
consumers to avail loan to buy vehicle which is driving the car loan market,” said
Mr. Karan Chechi, Research Director with TechSci Research, a research-based
global management consulting firm.
“Automotive Loan Market – Global Industry
Size, Share, Trends, Opportunity, and Forecast, 2018-2028F, Segmented By Vehicle
Type [Two-Wheeler, Passenger Car, Commercial Vehicle], By Provider Type [Banks,
NBFCs (Non-Banking Financial Services, OEM (Original Equipment Manufacturer), Others
(Fintech Companies)], By Percentage of Amount Sanctioned
[Less than 25%, 25-50%, 51-75%, More than 75%], By Tenure [ Less than 3 Years,
3-5 Years, More than 5 Years], By Region, Competition, Forecast & Opportunities, 2018-2028F”, has evaluated the future growth
potential of automotive loan in the global market and provides statistics and
information on market structure, size, share, and future growth. The report is
intended to provide cutting-edge market intelligence and help decision makers
take sound investment decisions. Besides, the report also identifies and
analyzes the emerging trends along with essential drivers, challenges, and
opportunities present in the global automotive loan market.
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