The global car financing market is primarily driven by the rising consumer aspiration for car ownership. The emergence of non-banking financial companies that offer lucrative zero down payment financing schemes and low interest EMIs have lured the young population to own car despite less capital at disposal.
The report on the global car financing market is appropriately segmented on the basis of service provider, vehicle, sales network, tenure, and region. Passenger vehicles segment is anticipated to rise at a healthy clip over the forecast period through 2026.
The report compiled by seasoned analysts provides a brilliant assessment of the car financing market by examining demand drivers, restraints, trends, opportunities, competitive dashboard, and other important aspects.
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Global Car Financing Market: Trends and Opportunities
Improving macroeconomics coupled with increasing number of first time car buyers are some key trends that have come to the fore in emerging economies. To serve this, several financial institutions as well as non-banking financial companies are offering car financing as a key business activity. Non-banking financial companies offer car financing at less stringent loan eligibility criteria and flexible repayment tenure which lures consumers for car ownership.
Apart from this, rising trend of digital underwriting and adoption of effective risk management strategies by car financiers are fuelling the car financing market. In addition, aggressive sales strategies adopted by car financiers to stay in business is serving to provide further boost to this market. Furthermore, differentiated product offerings and subvention based schemes to be favorable for customers is likely to bode well for car financing market.
Meanwhile, car financiers can vie to reap growth from opportunities arising via dealer channels and walk-ins. Affordable financing options, flexible repayment, and high loan-to-value ratio are some favorable facets of the car financing market.
Increasing practices of switch to newer models that boosts car sales and consumer preference for a lower vehicle cycle opens avenues for car financiers. Buyback options offered by car dealers and OEM warranty schemes that may require refinancing will provide new opportunities to the car financing market.
On the flip side, unavailability of complete consumer credit history and risk of loan default are challenges for the car financing market.
Global Car Financing Market: Geographical Analysis
The key regions into which the car financing market is classified are North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. Asia Pacific, among them, is anticipated to expand at a rapid pace due to increased vehicle ownership. Consumers in emerging economies in the region that are increasingly buying big ticket items opt for car financing for car buy. Middle-class households in developing countries that have less disposal capital to purchase car have high demand for car financing.
North America and Europe are relatively mature markets for car financing. First time car buyers and low-income households opt for car financing in these regions.
Global Car Financing Market: Competitive Analysis
Key companies operating in the global car financing market include Toyota Financial Services, VTB Bank OJSC, General Motor Financial Company, Ford Motor Credit, HDFC Bank, Hitachi Capital Asia Pacific, Volkswagen Financial Services, Bank of America, and Citibank.
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