US Used Car Loan Market to Grow at Double-Digit CAGR through 2026: TechSci Research

According to the TechSci report on the “U.S. Used Car Loan Market by Vehicle Type (Hatchback, Sedans, SUVs) by Financier (OEMs, Banks, NBFCs) by Percentage of Sanctioned Amount (up to 25% , 25-50%, 51-75%, greater than 75%) By Duration (Less than 3 Years, 3-5 Years) by Region, Competition Forecast and Opportunities, 2026”, the used car loan market in the United States has shown promising growth in the historic years to 2019 and is expected to continue growing over the next forecast years 2021 to 2026. The US used car loan market owes its growth to factors such as an increase in demand from used car owners. Moreover, increasing disposable income among the young population and changing lifestyle standards are expected to keep the market growing towards steady growth in the coming years. In addition, the government is expanding aids and financing organizations are offering viable and affordable loan programs and schemes that are easier to repay and lower interest rates, thereby supporting the growth of the used car loan market for United States over the next five years.

Used car loans are the financial aids and support that financing organizations provide to future consumers on certain interest rates. These sanctioned loans are specifically for used cars, due to the fact that used cars have lower durability, viability and other related factors that are considered. Used car prices are lower than original models and are therefore often charged with comparatively lower interest rates.

The US used car loan market is segmented by vehicle type, financiers, sanctioned amount percentage, tenure, competitive landscape and regional breakdown. Based on percentage of sanctioned amount, the market is further segmented into up to 25%, 25-50%, 51-75%, above 75%. For used cars, finance organizations often grant a loan based on the age of the car, the condition and viability of the vehicle, etc. Keeping these factors in mind, the financing organizations decide on the amount of the percentage of the price that can be loaned. a consumer to buy the car. In most cases, getting up to 25% loan sanctioned for the purchase is quite easy. Therefore, based on a percentage of the sanctioned amount, up to 25% of the total amount is more viable and expected to hold the largest market shares over the next five years. The 25-50% range also holds significant revenue shares of the market segment. However, obtaining a loan repaying more than 75% of the total cost is often impossible or requires very special cases. However, consumers like government officials and the families of the country’s martyrs can avail of these privileges.

Based on vehicle type, the market is divided into hatchbacks, hatchbacks, and SUVs. Hatchbacks are expected to hold the largest market revenue shares and assert their dominance in the market over the next five years. The growth of the market can be attributed to the surge in demand for mid-size cars. Also, the insurance costs and depreciation costs of hatchbacks are lower, and hence the market segment is witnessing impressive growth over the next five years. SUVs are also expected to hold large shares of the market segment owing to the growing demand for luxury cars and their affordability as a used car.

Holding the largest used car loan market shares in the United States, a partial list of major market players includes ICICI Bank, Ally Financial Inc., The Bank of America Corporation, Capital One Financial Corporation, The Ford Motor Company , General Motors Financial Company, Inc., JPMorgan Chase & Co., American Honda Finance Corporation, Pentagon Federal Credit Union, Toyota Motor Credit Corporation, among others. The presence of several organized market players has created a challenging market scenario for new market players. In addition, car manufacturers offer their financing services, or they have certain links with banks, or NBFC, to provide wider options to consumers. Although, NBFC’s used car loan sanctioning process is much more feasible for consumers when compared to car manufacturers’ financing solutions.

“The United States is the most penetrated market in the North American region. Due to the presence of a large number of market players in the country, the market players are very competitive and are constantly involved in the feasible and affordable loan schemes for the consumers. With the increasing number of cheap interest rates and better schemes with term loan repayment, market players are satisfying consumers with the accessibility of the car in their pocket. The new players in the market can focus on the best patterns to establish themselves in the market in the next five years of the future market,” said Mr. Karan Chechi, Research Director at TechSci Research, a global research consulting firm. research-based management.

“U.S. used car loan market by vehicle type (hatchback, sedans, SUVs) by financier (OEMs, banks, NBFCs) by percentage of amount sanctioned (up to 25%, 25-50%, 51-75%, above 75% ) By tenure (less than 3 years, 3-5 years) by region, competition forecast and opportunities, 2026” assessed the future growth potential of the car loan market opportunity in the United States and provides statistics and information on the size, structure and future market of the market. growth. The report aims to provide cutting-edge market insights and help decision-makers make sound investment decisions. In addition, the report also identifies and analyzes emerging trends along with key drivers, challenges and opportunities in the US used car loan market.

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