Press Release

Germany Automotive Loan Market is Fueled By Passenger Cars During the Forecast Period

The increasing trend of buying luxury car, growing captive banks as finance leaders, and comprehensive product range such as automotive loan, automotive protection contracts, etc. under one platform are the leading factors driving the Germany Automotive Loan Market during the projected period.


According to TechSci Research report, “Germany Automotive Loan Market–By Region Competition Forecast and Opportunities, 2018-2028F” The Germany automotive loan market is expected to grow faster during the forecast period. Germany is Europe’s leading production and sales market for cars, and the automotive loan requirement is consistently increasing. Due to the high price of vehicles, manufacturers and financiers often offer financing options at interesting parameters, influencing consumers to avail loans to purchase vehicles. Since many consumers cannot pay for the purchase of car or two-wheeler from regular income or savings, the loan offers an intriguing alternative. More individuals could now afford new automobiles due to improved economic conditions and growing consumer spending patterns, which supported the growth of the Germany automotive loan industry.

The automotive loan is the best solution that allows an individual to buy a vehicle for personal or commercial use if one needs more savings. Using automotive loans, an individual can purchase a car outright by obtaining a loan from a bank or another financial institution. Then, one must repay the loan in equal monthly installments and interest over a specified period. Nowadays, the critical functions of automotive loans include increasing the public profile of the captive, digitalization, and innovative technologies, offering a wide range of products under one platform, and creating new markets for financial services through e-mobility and alternative drive technologies.


The COVID-19 pandemic has impacted the requirements of cars as well. Due to the potential risk of infection, many individuals perceive public transportation as risky. Therefore, they are willing to switch to cars, motorbikes, or bicycles. Thus, the demand for vehicles has increased, and prices are rising with the increasing demand for vehicles. Hence, consumers are availing automotive loans to make the purchase which is anticipated to boost the market for the automotive loan industry in Germany.


According to the Federal Statistical Office (Destatis) report 2022, households are increasingly preferringmore than one car. The number of cars on German roads has never been higher, despite initiatives to encourage climate-friendly transportation in the country and historically high gasoline prices. As per calculations made by the Federal Motor Transport Authority (KBA) on vehicle registrations, Destatis announced that Germany achieved a new record car density of 580 vehicles per 1,000 people in 2021. Germany had 48.5 million registered passenger automobiles at the start of 2022, a considerable rise from the 48.2 million reported at the beginning of 2021 and is the most significant number ever. The statistics demonstrate that more individuals are choosing electric cars when they purchase a new vehicle: For example, between January and July 2022, 13.6% of newly-registered automobiles were electric, up from 0.6%, the year before.

 

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The Germany automotive loan market is segmented based on vehicle type, provider type, percentage of amount sanctioned, tenure and region.

The market is divided into two-wheeler, passenger cars, and commercial vehicles based on vehicle type. Among them, passenger cars are most popular in the Germany market as German manufacturers keep a keen focus on  quality and reliable vehicles that last for an extended period and also make the best luxury cars.

Based on the provider type, the market is segmented into banks, NBFCs (non-banking financial companies, OEM (original equipment manufacturers), and others (fintech companies)). Among them, banks are majorly preferred by Germans to avail loans as the financial system of Germany is well functioning.

Furthermore, based on the percentage of amount sanctioned, the market is segmented into less than 25%, 25-50%, 51-75%, and more than 75%. By tenure, the market is segmented into less than 3 years, 3-5 years, more than 5 years.

The market analysis also studies the regional segmentation to devise regional market segmentation, divided among south-west, south-east, north-west, north-east. Among which sout-west has a prominent share in the automotive loan market in Germany.


Key market players in the Germany automotive loan market include:

  • Volkswagen Bank GmbH
  • Mercedes-Benz Bank AG
  • Banque PSA Finance S.A.
  • Bank11 für Privatkunden und Handel GmbH
  • Süd-West-Kreditbank Finanzierung GmbH
  • Deutsche Bank AG; Nordfinanz GmbH
  • Auto Empire Trading GmbH
  • smava GmbH
  • MCE Bank GmbH

 

A borrower change on a car loan, which allows someone to transfer a car loan to not just another car but also to another person, is the new function made accessible to customers by smava GmbH.The new borrower acquires the existing loan. This must consent to all requirements for the takeover. There are two options for unpaid payments after the contract transfer to the new borrower: continuous monthly rate according to the contract or payment of the remaining amount with a one-time fee. This aspect will drive the automotive loan market during the forecast period in Germany.

 

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“Germany's rising demand for new and used vehicles witnessed significant growth during the forecast period. The need for automobile loans is driven by consumers preferring monthly loan installments due to increasing vehicle pricing. Additionally, the rise of non-banking financial institutions offering minimum interest rates and EMIs is encouraging consumers to obtain loans to buy vehicles, fueling the automotive loan in the Germany market.” said Mr. Karan Chechi, Research Director with TechSci Research, a research-based global management consulting firm.

Germany Automotive Loan Market Segmented By Vehicle Type (Two-Wheeler, Passenger Car, Commercial Vehicle), By Provider Type (Banks, NBFCs (Non-Banking Financial Companies, 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, By Company, Forecast & Opportunities, 2018-2028F, has evaluated the future growth potential of automotive loan in the Germany 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 Germany automotive loan market.


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Relevant Reports

Germany Automotive Loan Market By Vehicle Type (Two-Wheeler, Passenger Car, Commercial Vehicle), By Provider Type (Banks, NBFCs (Non-Banking Financial Company 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, By Company, Forecast & Opportunities, 2018-2028F

BFSI | Sep, 2023

The increasing trend of buying luxury cars, growing captive banks as finance leaders, and comprehensive product range such as automotive loan, automotive protection contracts, etc. under one platform, are the leading factors driving the Germany automotive loan market during the projected period.

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