Market Size of US Auto Loan Industry
Study Period | 2020 - 2029 |
Base Year For Estimation | 2023 |
Forecast Data Period | 2024 - 2029 |
Historical Data Period | 2020 - 2022 |
CAGR | 6.00 % |
Market Concentration | Medium |
Major Players*Disclaimer: Major Players sorted in no particular order |
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US Auto Loan Market Analysis
The United States auto loan market has a loan outstanding of USD 1.502 trillion in the current year and is poised to register a CAGR of more than 6% for the forecast period.
The growth of automobile loans in the United States has observed a continuous rise over the years. In terms of the interest rate on automobiles, new vehicles in the United States exist with a significantly lower interest rate as compared to used vehicles because of the lower level of price risk associated with them, and this drives their loan product sales. Among the passenger vehicle sales in the country, SUVs and Pickup trucks exist with more than 60% of the sales.
As the number of vehicles in operation is observing a continuous increase, sales of automobiles are increasing, leading and rising business opportunities for the automobile loan providers. The vehicle ownership rate in the United States exists at more than 91%, leading to the creation of a business cycle of new and used vehicle sales in the market and financial institutions emerging with a variety of loans and financing products. In addition, the rise in the number of fintech institutions and financial companies in the country is expanding the reach of the auto loan market with a competitive rate of interest over various periods of auto loan.
Post-COVID-19, the sales of electric vehicles in the United States are observing a continuous increase, with the government launching various initiatives to make them affordable with the creation of emerging opportunities in the automobile loan market. Recently, the government, under its Inflation Reduction Act, launched a tax credit of USD 7500 for the purchase of electric vehicles if the final assembly is done in the United States. In addition, automobile manufacturers and sellers such as Ferrari have started to accept cryptocurrency for their sales, and financing firms are opting for various cryptocurrencies as collateral for automobile loans, taking the market in a new direction.
US Auto Loan Industry Segmentation
An automobile loan allows a user to borrow money from a lender and use it to purchase different forms of vehicles, which include passenger and commercial vehicles. The loan is paid back to the issuer in the form of installments over some time with an agreed amount of interest payment.
The United States auto loan market is segmented by vehicle type (passenger vehicles, commercial vehicles), by ownership (new vehicles, used vehicles), by end-user (individuals, enterprises), and by loan provider (banks, OEMs, credit unions, and other loan providers).
The report offers market sizes and forecasts for the United States auto loan market in value (USD) for all the above segments.
By Vehicle Type | |
Passenger Vehicle | |
Commercial Vehicle |
By Ownership | |
New Vehicle | |
Used Vehicle |
By End User | |
Individual | |
Enterprise |
By Loan Provider | |
Banks | |
OEM | |
Credit Unions | |
Other Loan Providers |
US Auto Loan Market Size Summary
The United States auto loan market is experiencing a robust expansion, driven by a consistent increase in vehicle ownership and sales. The market is characterized by a significant preference for SUVs and pickup trucks, which dominate passenger vehicle sales. This trend is further bolstered by the lower interest rates on new vehicles compared to used ones, attracting more consumers to opt for auto loans. The rise in vehicle prices, coupled with higher inflation rates on automobiles, has led to an increased reliance on loans and financing instruments. Financial institutions, including traditional banks and emerging fintech companies, are expanding their offerings to meet the growing demand, providing competitive interest rates and diverse loan products. The market's growth is also supported by government initiatives aimed at promoting electric vehicle sales, such as tax credits, which create new opportunities for auto loans.
The market landscape is highly fragmented, with numerous players competing to capture market share. This competition is fostering innovation in auto loan products, with technological advancements in digital banking and the use of cryptocurrency as collateral gaining traction. States like Texas, Wyoming, and Montana are leading in light truck sales, prompting lenders to focus on state-specific loan products. Partnerships, such as that between AutoFi Inc. and Santander Consumer USA Inc., are enhancing the consumer and dealer experience, further driving market growth. The continuous rise in vehicle prices and interest rates is creating a cycle that benefits auto loan providers, increasing their interest revenue. As the market evolves, companies like Ally, Bank of America, and Toyota Financial are at the forefront, adapting to the changing dynamics and consumer preferences.
US Auto Loan Market Size - Table of Contents
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1. MARKET DYNAMICS AND INSIGHTS
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1.1 Market Overview
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1.2 Market Drivers
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1.2.1 Increase In Demand For Light Trucks
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1.2.2 Quick Processing of Loan through Digital Banking
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1.3 Market Restraints
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1.3.1 Increasing Inflation In Automobile Market
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1.4 Market Opportunities
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1.4.1 Flexible Interest Rate by Financing Companies Raising their Market Share
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1.4.2 Emerging Market of Electric Vehicles Expanding the Auto Loan Market
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1.5 Industry Attractiveness - Porter's Five Forces Analysis
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1.5.1 Bargaining Power of Suppliers
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1.5.2 Bargaining Power of Buyers
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1.5.3 Threat of New Entrants
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1.5.4 Threat of Substitutes
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1.5.5 Intensity of Competitive Rivalry
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1.6 Technological Innovations in United States Auto Loan Market
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1.7 Impact of COVID-19 on the Market
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2. MARKET SEGMENTATION
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2.1 By Vehicle Type
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2.1.1 Passenger Vehicle
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2.1.2 Commercial Vehicle
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2.2 By Ownership
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2.2.1 New Vehicle
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2.2.2 Used Vehicle
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2.3 By End User
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2.3.1 Individual
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2.3.2 Enterprise
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2.4 By Loan Provider
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2.4.1 Banks
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2.4.2 OEM
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2.4.3 Credit Unions
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2.4.4 Other Loan Providers
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US Auto Loan Market Size FAQs
What is the current US Auto Loan Market size?
The US Auto Loan Market is projected to register a CAGR of greater than 6% during the forecast period (2024-2029)
Who are the key players in US Auto Loan Market?
Ally, Bank of America, Toyota Financial, Capital One and Lending Tree are the major companies operating in the US Auto Loan Market.