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Automotive Finance Market Size

Report ID: GMI11750
Published Date: Oct 2024
Report Format: PDF

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Automotive Finance Market Size

The global automotive finance market size was valued at USD 323.3 billion in 2023 and is projected to grow at a CAGR of 6.2% between 2024 and 2032. Rising consumer demand for vehicles, especially electric and hybrid models, is driving the need for financing options. As environmental concerns and sustainability gain importance, more people are choosing eco-friendly vehicles, which often come with higher price tags. This shift requires accessible financing solutions to make these modern technologies more affordable. In response, lenders are providing tailored financing options, including attractive terms and incentives specifically for electric and hybrid vehicle purchases.

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For instance, in August 2024, Plug-in hybrid electric vehicle (PHEV) sales in the United States saw a modest increase, rising from 1.7% to 2.0% of the total vehicle market year over year. This increase reflects a broader trend in the automotive sector, where the combined sales of hybrid vehicles, plug-in hybrids, and battery electric vehicles (BEVs) rose from 17.8% to 18.7%.

Automotive Finance Market Report Attributes
Report Attribute	Details
Base Year:	2023
Automotive Finance Market Size in 2023:	USD 323.3 Billion
Forecast Period:	2024 to 2032
Forecast Period 2024 to 2032 CAGR:	6.2%
2032 Value Projection:	USD 554.1 Billion
Historical Data for:	2021 – 2023
No. of Pages:	240
Tables, Charts & Figures:	200
Segments covered:	Vehicle, Provider, Finance, End-user
Growth Drivers:	Rising expansion of financial services Increasing adoption of e-commerce Technological advancements in the financing process Growing electric and hybrid vehicle sales
Pitfalls & Challenges:	Growing regulatory compliance Increasing market competition

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The development of online car buying platforms has changed the automotive sales landscape, leading to higher demand for automotive financing. Consumers now prefer digital transactions for their convenience and efficiency, often looking for quick and easy financing solutions to complete their purchases. These platforms simplify the buying process by allowing consumers to research financing options, compare rates, and arrange loans from the comfort of their homes, making financing a key part of the online car-buying experience.

The automakers and dealerships are increasingly offering in-house financing solutions, which greatly enhance convenience for buyers. Customers can complete their purchases without needing to seek out external lenders, as financing is available right at the point of sale. This streamlined approach not only saves time but also provides customized financing options to meet individual needs. Additionally, in-house financing typically leads to faster approvals and easier communication, making the entire car-buying process more efficient and customer-friendly.

Authors: Preeti Wadhwani, Satyam Jaiswal

Frequently Asked Questions (FAQ) :

The market size of automotive finance reached USD 323.3 billion in 2023 and is set to grow at a 6.2% CAGR from 2024 to 2032, driven by rising consumer demand for electric and hybrid vehicles.

The new vehicle segment accounted for over 86% of the market share in 2023 and is expected to exceed USD 489.3 billion by 2032, due to innovations in vehicle technology, particularly connected cars and advanced safety systems.

The bank segment held around 34% of the market share in 2023, offering a variety of financing options such as leases, loans, and subscription services to meet diverse consumer needs.

The U.S. market accounted for 84% of the revenue share in 2023 and is expected to exceed USD 179.6 billion by 2032, driven by an improving economy and rising consumer confidence.

Major players in the industry include Ally Financial, Bank of America, Capital One Auto Finance, Ford Credit, GM Financial, Honda Financial Services, Santander Consumer USA, Toyota Financial Services, and Wells Fargo Auto.