The findings confirmed that the used-car mortgage class is the fastest-growing phase, registering a 26.2 per cent CAGR over the identical five-year interval. Borrower numbers within the used-car phase expanded 2.4 instances, reflecting higher formalisation and its transition right into a mainstream credit score product.
“India’s automobile finance market is coming into a section of extra segmented and diversified development, with industrial autos and used vehicles rising as key drivers, alongside a premiumisation development in auto financing,” the report acknowledged.
Learn extra: Mid-size SUVs achieve share in India as automobile consumers transfer to greater autos
Two-wheeler financing maintains the most important total borrower quantity. The lively borrower rely on this phase rose from roughly 2.3 crore in June 2021 to three.6 crore in June 2026. The 2-wheeler phase continues to introduce customers to credit score, with 80 per cent of debtors recognized as new-to-product.
Auto financing mirrored a shift towards higher-value disbursements, as common publicity per borrower elevated at a 9.2 per cent CAGR from June 2021 to June 2026. The share of auto loans exceeding Rs 15 lakh rose from 27.6 per cent in Q1 FY25 to 29.8 per cent in Q1 FY27.
“Industrial automobile loans are the clearest development engine,” whereas used-car financing serves because the “fastest-formalizing alternative.”Learn extra: Carmakers partly soak up commodity shocks to maintain manufacturing on monitor
As per the report, total automobile mortgage originations rose 17.1 per cent year-on-year in Q1 FY27, pushed by increased mortgage quantities and regular transaction volumes throughout segments. The common auto-loan ticket dimension reached Rs 8.6 lakh. In used-car financing, new-to-product debtors accounted for 75 per cent of whole originations throughout the interval.
On asset high quality, later-stage delinquency indicators present enchancment throughout classes. Auto loans keep the bottom threat profile, whereas industrial automobile loans present comparatively increased early-stage delinquency.
“Common ticket sizes are rising, lively loans per borrower are growing in some segments (particularly auto loans), and a rising multiloan borrower cohort amongst them suggests deeper lender relationships,” the report highlighted.
The report added that these borrower tendencies additionally point out a “want for tighter bureau-level focus checks,” citing a rise in industrial automobile debtors with two or extra lively loans from 15.7 per cent in June 2021 to 19.9 per cent in June 2026.
