Vehicle-loan assets under management at Indian non-banking financial companies are projected to reach nearly ₹11 lakh crore by March 2027 [1].
This surge reflects a shifting credit landscape in India, where the appetite for used vehicles is growing faster than the market for new cars. The trend signals a broadening of credit access and a change in consumer behavior toward premium pre-owned automobiles.
Analysts said that vehicle-loan assets under management will grow at an annual rate of 16% to 17% over the current and next fiscal years [2]. This expansion is driven by a combination of macro-economic tailwinds and specific policy measures designed to stimulate the credit market.
The used-vehicle segment is a primary engine of this growth. Used-vehicle loan assets under management have a compound annual growth rate of nearly 15% [1]. This segment is currently outpacing new-vehicle loans, fueled largely by rising aspirational demand for premium used cars [3].
NBFCs have become central to this transition by providing flexible financing options that traditional banks may overlook. The ability of these institutions to scale their portfolios allows more consumers to enter the vehicle market, particularly in the secondary segment where pricing is more volatile but demand remains high [3].
As the market moves toward the March 2027 target, the continued growth of these assets will depend on the stability of the macro-economic environment and the continued efficacy of current policy supports [1].
“Vehicle-loan assets under management at Indian non-banking financial companies are projected to reach nearly ₹11 lakh crore by March 2027”
The rapid growth of NBFC vehicle loans, particularly in the used-car sector, indicates a maturing automotive market in India. As consumers pivot toward premium pre-owned vehicles, the financial sector is adapting by creating specialized credit products. This shift suggests that affordability and aspirational value are currently outweighing the preference for new ownership, potentially permanently altering the credit risk profile of the Indian auto-finance industry.
