Automotive Finance Market 2030 Growing Worldwide By Best Key players- Ally Financial; Bank of America; Capital One; Chase Auto Finance; Daimler Financial Services; Ford Motor Credit Company; GM Financial Inc.; Hitachi Capital; Toyota Financial Services; Volkswagen Financial Services

 

The global automotive finance market size is expected to reach USD 451.71 billion by 2030, registering a CAGR of 7.2% from 2022 to 2030, according to a new report by Grand View Research, Inc. Growing global demand for autonomous cars is expected to drive the market growth. Increasing government regulations on rising road safety are creating the need for autonomous cars with highly advanced technologies worldwide.

The investment made in the automotive finance industry is also creating new opportunities for market growth. For instance, in January 2021, MotoRefi, an automotive refinancing company, announced that it raised USD 10.0 million in a round that Moderna Ventures led. The company uses this funding to hire more employees and expand its offerings.

Various auto car manufacturers are entering into a partnership with automotive finance providers to enhance their customer experience. For instance, in March 2022, CIG Motors, a GAC brand distributor, announced its collaboration with Polaris Bank Limited. By means of this partnership, the former company aims to make vehicle ownership and acquisition easy for Nigerians through the Easy Buy scheme.

COVID-19 had a negative impact on the market growth in 2021. However, the global auto manufacturers, lenders, and dealers have got adjusted to the current COVID-19 situation. For instance, the automotive manufacturers incentivized their new car sales to grow their sales amid COVID-19. These efforts taken by the automakers are expected to improve the demand for automotive finance during the forecast period.

The growing importance of captive automotive finance worldwide is creating new opportunities for market growth. Captive finance is a subsidiary of an automaker that provides loans and financial services to the company's customers. The benefits of starting a captive finance company include personalized finance options for the customers, and equipment rental programs, among others. The companies such as Honda Finance, Ford, Infiniti, and Nissan are seeing strong growth in captive finance.

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The growing importance of cryptocurrency across the automotive finance industry is expected to drive market growth. Various automotive technology providers are adopting cryptocurrency-based payments to enhance their offerings. For instance, in March 2022, Car Now, an automotive industry’s digital retailing company, announced its partnership with Cion Digital, a blockchain orchestration platform. Through this partnership, Car Now will offer auto dealers compliant and fast crypto payment and lending solutions.

Automotive Finance Market Report Highlights

• The banks segment is expected to dominate the market growth during the forecast period as banks offer secure financing to their customers. Banks also offer customers the facility to apply for pre-approval. This facility helps customers in comparing estimated loan offers
• The direct segment is expected to dominate the market growth during the forecast period. Numerous customers across the globe prefer direct auto loans as they can easily access and get loans from the credit unions, banks, and other loan lending companies
• The leasing segment is expected to register the highest CAGR during the forecast period. Customers are focusing on adopting the leasing model as it is a more flexible model in comparison to others for new, shared, and used vehicles that could comprise services such as insurance
• The passenger segment dominated the market in 2021 and is expected to show similar trends during the forecast period. The number of passenger vehicles including pickup trucks and others on the road, continues to rise across the globe, thereby creating growth opportunities for the passenger vehicles segment during the forecast period
• The presence of many prominent automotive finance providers in the European region and the adoption of innovative tools, such as biometrics, e-contracts, and machine learning, is expected to drive the regional market growth during the forecast period

Artificial intelligence technology is increasingly being used in the automotive finance sector, in order to improve the credit underwriting process, analyze the data, accurately predict whether the applicant can turn delinquent, and thus enhance the approval process. Various automotive artificial intelligence technology providers are making efforts to develop AI-enabled lending platforms. For instance, in October 2021, Upstart, a leading AI lending platform, announced the launch of Upstart Auto Retail software. This software includes AI-enabled financing features which enable the lenders to improve their customer experience.

The growing global demand for automotive refinancing is also one of the major factors, creating new opportunities for market growth. The demand for refinancing is growing due to its benefits, such as lower monthly car payments, reduced interest rates, and shortened loan terms. According to the statistics provided by Rate Genius, a fintech company, 16.0% more additional Americans applied to refinance their automotive loans in 2020 as compared to 2022. As compared to 2022, as many as 17.0% of additional borrowers refinanced their car loans successfully in 2020, as compared to 2022.

List of Key Players in the Automotive Finance Market

• Ally Financial
• Bank of America
• Capital One
• Chase Auto Finance
• Daimler Financial Services
• Ford Motor Credit Company
• GM Financial Inc.
• Hitachi Capital
• Toyota Financial Services
• Volkswagen Financial Services