Vehicle financing refers to the range of financial products available which allows people to acquire a vehicle with any arrangement other than a full-cash distinct lump payment. It is also known as auto finance or car finance. It is widely used both by members of the businesses and public. All members have two financing options: direct lending and dealership financing. In direct lending, the consumer gets a loan directly from lender, which may be a bank, credit union or finance company. An extensive range of finance products are available in the vehicle loan categories.
According to study, “US Vehicle Finance Market Outlook to 2023 –By Banks and Non Bank Entities including Captives and Credit Unions and Finance Companies (Auto Loan Portfolio), By New and Used Vehicles, By Type of Vehicle Financed (Passenger Cars and Light Trucks), By Loan Time Period and By Risk Category” the key companies operating in the US vehicle finance market are Toyota Motor Credit Corporation, Nissan Motor Acceptance Corporation, Ford Motor Credit, American Honda Motor Corporation, GM Financial, Pentagon Federal Credit Union, Ally Financial, Credit Acceptance, Bank of America, Santander Consumer USA, Chase Auto Finance, Wells Fargo, Capital One. Key vendors are emphasizing on offering special correspondences coupled with funding for insurance & services, especially in rental sector. Vendors are also focusing on business customers for instance transportation start-ups and car rental companies with customized products for B2B segment is expected to boost industry growth.
Based on service type, vehicle finance market is segmented into used vehicle and new vehicle. Based on purpose type, market is segmented into lease and loan. Based on vehicle type, market is segmented into light trucks and passenger cars. Based on lender category, market is segmented into credit unions, banks, private finance companies and captives & Buy Here Pay Here (BHPH). Banks hold major share in the market due to their reliable lending reputation & digital lending platforms. Based on risk category between new and used vehicles, market is segmented into super prime, prime, non-prime, subprime and deep sub-prime. Based on loan venture, market is segmented into less than 3 years, three years, four years, five years, six years and seven years & more. In addition, based on industry vertical, market is segmented into commercial use, residential use, government use and others.
The vehicle finance market is driven by rise in adoption of e-commerce business platform, followed by increase in demand for electric vehicle (EV) & autonomous vehicle, rise in consumer aspiration for car ownership, decrease in unemployment rate, rise in cab service financing, increase in number of innovative ways, growth in investments in autonomous vehicles, increase in per capita income levels and rise in sales of vehicles. However, instable vehicle sales, increase in debts from various borrowers, rise in loan default rates, and a pullback on loan issues lead by banks may impact the market. Moreover, rise in use of certified pre-owned car sales is a key opportunity for market.
It is anticipated that the US vehicle finance market will be reached at rapid pace owing to rise in vehicle replacement rates over the forecast period. It is expected that future of the market will be bright due to rise in adoption of effective risk management strategies by vehicle financiers and increase in trend of digital underwriting.
Key Segments Covered:-
By New and Used Vehicle
New Vehicle
Used Vehicle
By Type Vehicle
Passenger Cars
Light Trucks
By Lender Category
Banks
Captives and BHPH
Credit Unions
Private Finance Companies
By Risk Category between New and Used Vehicles
Super Prime
Prime
Non-prime
Sub-prime
Deep Sub-rime
By Loan Tenure between New and Pre-Owned Motor Vehicles
Less than 3 Years
Three Years
Four Years
Five Years
Six Years
Seven Years or more
Key Target Audience:-
Existing Auto Finance Companies
Banks
Captive Finance Companies
Credit Unions
Private Finance Companies
New Market Entrants
Government Organizations
Investors
Automobile Associations
Automobile OEMs
Time Period Captured in the Report:-
Historical Period: 2013-2018
Forecast Period: 2018-2023
Key Companies Covered:-
Banks
Ally Financial
Wells Fargo
Bank of America
Chase Auto Finance
Capital One
Captives, Credit Unions and Finance Companies
Toyota Motor Credit Corporation
Ford Motor Credit
Nissan Motor Acceptance Corporation
GM Financial
American Honda Motor Corporation
Credit Acceptance
Santander Consumer USA
Pentagon Federal Credit Union
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