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United States Used Car Loan Market

United States Used Car Loan Market

United States Used Car Loan Market, By Vehicle Type (Hatchback, Sedans, SUVs, Sports Utility Vehicles And Multi-purpose Vehicles); Financier (OEM, Banks And NBFCs), Percentage of Amount Sanctioned (Up to 25%, 25-50%, 51-75% And Above 75%), Tenure (Less than 3 years And 3-5 years) Trend Analysis, Competitive Market Share & Forecast, 2018-2028

  • Published Date: November 2022
  • Report ID: BWC22555
  • Available Format: PDF
  • Page: 134

Report Overview

United States Used Car Loan market is growing owing to surging demand for car ownerships and increasing use of online platforms. In addition, increasing government and financing bodies aid are driving the market.

United States Used Car Loan Market - Industry Trends & Forecast Report 2028

United States Used Car Loan market exhibiting a CAGR of 10.0% during the forecast period. The rapid expansion of the market is predominantly due to the Surging Demand for Car Ownership as the car is often considered a status symbol; hence people are increasingly leaning towards buying used cars. In addition to increasing the use of online platforms, loan providers are concentrating on providing their clients with efficient and straightforward internet finance settings, which makes the process easy for customers and thereby drives the market. Moreover, increasing government and financing bodies aid is also propelling the United States Used Car Loan market.

Used Car Loan - Overview

A used car is a previously owned car that has been driven by one or more owners. Various channels are used to sell used cars, including franchise and independent auto dealers, auctions, rental car agencies, and private party sales. Used Car Loans are the financial aid and support lending organizations offer their customers at specific interest rates. As used cars have reduced durability, viability, and other associated issues that are taken into account, these sanctioned loans are only for used cars. Used car prices are lower than those of new automobile prices; hence they frequently have cheaper interest rates in comparison. Online platforms make it simple to inspect used cars and provide information about their specification and can compare too.

United States Used Car Loan Market Forecast and Trends

Growth Drivers

Surging Demand for Car Ownerships Is Driving the Market

The market growth can be attributed to the surge in demand for used cars by not only the middle age population as well as the young adult population. Moreover, the growing need to own a car or vehicle to qualify for higher living standards with society is driving the growth of the United States Used Car Loan market during the forecast period. As the car is often considered a status symbol, people increasingly lean towards buying used cars. In addition, it gives financial stability to the new owner even after buying a luxurious car. This is expected to drive the used car loan market during the forecast period in the United States.  

Increasing Government and Financing Bodies Aid Are Driving the Market

The market growth can be attributed to the surge in demand with the government and financing bodies support of the customer. Moreover, the rising number of schemes for loans from banks and other investment firms is driving the growth of the United States Used Car Loan market during the forecast period. Additionally, feasible and inexpensive loans from financing banks, NBFCs, and OEMs that are frequently offered at reduced interest rates and provide lower entry charges are some of the primary causes for the market development, thereby supporting the growth of the United States used car loan market in the upcoming years.

Increasing Use of Online Platforms Is Driving the Market

The major growth factors in the market are the rise in advanced benefits from online car loan application systems and multiple options for vehicle purchases. Auto loan providers are concentrating on providing their clients with efficient and straightforward internet finance settings. In order to efficiently structure loans for their clients, these providers are widely utilizing Loan Origination Software (LOS) and online technologies. By giving digitally savvy customers access to three key capabilities—complete end-to-end purchasing capabilities, extensive vehicle data and photos, useful search tools, and distinctive delivery options. Online providers are starting to challenge the dominance of traditional used-car dealers and spur the growth of loans in the United States for used cars.  

Restraints

Financial Issues and High Competition Are Affecting the Market Growth

During the pandemic, a financial issue arose for the customer, which hampered the used Car Loan market growth in the United States. As a result, there is a cash crunch for people who want to buy a used car through loans, and the decision to invest the money in non-essential goods is relatively risky for the population. But now the market is recovering, and customers are buying the used car. However, the market is highly diversified, with many players such as OEMs, banks, and NBFCs. The high competition increases the expenses on operation and marketing, making it highly challenging for the market players to gain new customers. As a result, these factors hamper the used car loan market in the United States.

Impact of COVID-19 on United States Used Car Loan Market

The used car loan market in the United States has seen consistent investment in its expansion and has grown to be a significant driver of economic expansion. However, the COVID-19 pandemic has caused economic instability and had a significant impact on this industry. Additionally, because of rising unemployment and income insecurity, there is less demand for and a delay in leasing or buying used cars during a pandemic. Additionally, the supply chain for automotive products has been severely affected by a lack of raw materials and logistics, which has impeded the expansion of the market.

United States Used Car Loan Market - By Vehicle Type

The market is segmented into hatchbacks, sedans, SUVs, sports utility vehicles, and multi-purpose vehicles based on vehicle type. The greatest market share is projected for hatchbacks over the projection period 2022–2028. Hatchbacks are less expensive and feature a larger boot, and they may easily fit through small areas thanks to their compact shapes. Hatchback cars benefit fuel sales in the nation, and the increase in demand for mid-sized cars is responsible for the market expansion. Additionally, hatchback automobiles have reduced insurance and depreciation costs, which contributes to the market segment's excellent growth over the next five years. Due to the growing desire for premium vehicles and their accessibility as used vehicles, SUVs are also predicted to hold sizeable shares of the market category.

United States Used Car Loan Market - By Financier

The used car loan market is segmented into three categories by financiers: OEM, banks, and NBFCs. The bank's segment dominated the used car loan market, and it is anticipated that it will continue to hold this position during the forecast period. This is explained by the fact that banks retain brand loyalty for their product offerings in the market and allow simpler accessibility of auto loan services. The market for Used Car Loans is projected to be dominated by the NBFCs category, which is currently seeing rapid growth. Important NBFCs had a liquidity crunch following COVID-19, a number of lenders strengthened their borrower screening procedures. The NBFCs segment is supported by the financing that they provide, which aids in business expansion and boosts sales.

United States Used Car Loan Market - By Percentage of Amount Sanctioned

Based on the percentage of the amount sanctioned, the market is segmented into up to 25%, 25-50%, 51-75%, and above 75%. Finance companies frequently offer loans for used cars based on factors like the vehicle's age, viability, and more. Keeping these factors in mind, decision of the percentage of the amount sanctioned will be taken. In most cases, getting up to 25% loans sanctioned for the purchase is quite easy; as a result, up to 25% is expected to hold the largest market shares during the forecast period. 25-50% range also holds significant market shares. A loan above 75% of the total cost is often impossible or requires very special cases, such as consumers like government representatives and the relatives of the nation's martyrs.

Competitive Landscape

Key players operating in the United States Used Car Loan market are ICICI Bank, Ally Financial Inc., The Bank of America, The Ford Motor Company, Capital One Financial Corporation, American Honda Finance Corporation, General Motors Financial Company, Inc., JPMorgan Chase & Co., Pentagon Federal Credit Union, Toyota Motor Credit Corporation and other prominent players.

In the United States, there are several market participants in the used automobile loan industry. The players always engage in practical and inexpensive loan programs for the customers while also being fiercely competitive. Market players are gratifying consumers by making cars accessible within reach of their budgets through an increase in low-interest rates, better programs, and postponed loan repayment times. The majority of these companies have agreements with banks and governmental bodies for the purpose of offering loans to customers. New market participants can concentrate on better schemes to establish themselves in the industry in the upcoming future market.

Recent Development

  • In May 2022, J.P. Morgan's announced the launch of "Fusion by J.P. Morgan" (Fusion), a data platform that offers institutional investors complete data management and reporting options. Clients will be able to effortlessly integrate and combine data from many sources into a single data model using Fusion, which will bring the advantages of scale and lower costs, as well as the ability to uncover timely analysis and insights.

  • In Nov 2021, Toyota Motor Credit Corporation (TMCC) announced the entry into a letter of intent with Great American Outdoors LLC, Cabela's, and the White River Marine Group. Through this arrangement, Toyota will strengthen its ties to Bass Pro Shops and Cabela's and provide financial services for the company's boats, all-terrain vehicle products, and other mobility items.

Scope of the Report

Attributes

Details

Years Considered

Historical data – 2018-2021

Base Year – 2021

Estimated Year - 2022

Forecast – 2022 – 2028

Facts Covered

Revenue in USD Million

Product Service/Segmentation

By Vehicle Type, By Financier, By Percentage of Amount Sanctioned, By Tenure.

Key Players

ICICI Bank, Ally Financial Inc., The Bank of America, The Ford Motor Company, Capital One Financial Corporation, American Honda Finance Corporation, General Motors Financial Company, Inc., JPMorgan Chase & Co., Pentagon Federal Credit Union, Toyota Motor Credit Corporation and other prominent players.

 

By Vehicle Type

  • Hatchback

  • Sedans

  • SUVs

  • Sports Utility Vehicles

  • Multi-purpose Vehicles

By Financier

  • OEM

  • Banks

  • NBFCs

By Percentage of Amount Sanctioned

  • Up to 25%

  • 25-50%

  • 51-75%

  • Above 75%

By Tenure

  • Less than 3 years

  • 3-5 years

  1. Research Framework
    1. Research Objective
    2. Product Overview
    3. Market Segmentation
  2. Executive Summary
  3. United States Used Car Loan Market Insights
    1. Industry Value Chain Analysis
    2. DROC Analysis
      1. Growth Drivers
        1. Surging Demand for Car Ownerships
        2. Increasing Government and Financing Bodies Aid
        3. Increasing Use of Online Platforms
      2. Restraints
        1. Financial Issues and High Competition
        2. Others
      3. Opportunities
        1. Technological advancements
      4. Challenges
        1. Increase in debts from various borrowers
    3. Technological Advancements/Recent Developments
    4. Regulatory Framework
    5. Porter’s Five Forces Analysis
      1. Bargaining Power of Suppliers
      2. Bargaining Power of Buyers
      3. Threat of New Entrants
      4. Threat of Substitutes
      5. Intensity of Rivalry
  4. United States Used Car Loan Market Overview
    1. Market Size & Forecast by Value, 2018-2028
      1. By Value (USD Million)
    2. Market Share & Forecast
      1. By Vehicle Type
        1. Hatchback
        2. Sedans
        3. SUVs
        4. Sports Utility Vehicles
        5. Multi-purpose Vehicles
      2. By Financier
        1. OEM
        2. Banks
        3. NBFCs
      3. By Percentage of Amount Sanctioned
        1. Up to 25%
        2. 25-50%
        3. 51-75%
        4. Above 75%
      4. By Tenure
        1. Less than 3 years
        2. 3-5 years
  5. Competitive Landscape
    1. List of Key Players and Their Offerings
    2. Market Share Analysis, 2021
    3. Competitive Benchmarking, By Operating Parameters
    4. Key Strategic Development (Merger, Acquisition, Partnership.)
  6. Impact of Covid-19 on United States Used Car Loan Industry
  7. Company Profile (Company Overview, Financial Matrix, Competitive landscape, Key Personnel, Key Competitors, Contact Address, SWOT, and Strategic Outlook) **
    1. ICICI Bank
    2. Ally Financial Inc.
    3. The Bank of America
    4. The Ford Motor Company
    5. Capital One Financial Corporation
    6. American Honda Finance Corporation
    7. General Motors Financial Company, Inc.
    8. JPMorgan Chase & Co.
    9. Pentagon Federal Credit Union
    10. Toyota Motor Credit Corporation
    11. Other prominent players

 

  1. Key Strategic Recommendations
  2. Research Methodology
    1. Qualitative Research
      1. Primary & Secondary Research
    2. Quantitative Research
    3. Market Breakdown & Data Triangulation
      1. Secondary Research
      2. Primary Research
    4. Breakdown of Primary Research Respondents, By Region
    5. Assumption & Limitation

 

*Financial information in case of non-listed companies will be provided as per availability

**The segmentation and the companies are subjected to modifications based on in-depth secondary for the final deliverable

 

List of Figures

 

Figure 1        United States Used Car Loan Segmentation

Figure 2        United States Used Car Loan Market Value Chain Analysis

Figure 3        Company Market Share Analysis, 2021

Figure 4        United States Used Car Loan Market Size, By Value (USD Million), 2018-2028

Figure 5        United States Used Car Loan Market Share, By Vehicle Type, By Value, 2018-2028

Figure 6        United States Used Car Loan Market Share, By Financier, By Value, 2018-2028

Figure 7        United States Used Car Loan Market Share, By Percentage of Amount Sanctioned, By Value, 2018-2028

Figure 8        United States Used Car Loan Market Share, By Tenure, By Value, 2018-2028

List of Tables

Table 1         United States Used Car Loan Market Size, By Product Type, By Value, 2018-2028

Table 2         United States Used Car Loan Market Size, By Vehicle Type, By Value, 2018-2028

Table 3         United States Used Car Loan Market Size, By Financier, By Value, 2018-2028

Table 4         United States Used Car Loan Market Size, By Percentage of Amount Sanctioned, By Value, 2018-2028

Table 5         United States Used Car Loan Market Size, By Tenure, By Value, 2018-2028

Table 6                 ICICI Bank Company Overview

Table 7                 ICICI Bank Financial Overview

Table 8                Ally Financial Inc. Company Overview

Table 9                Ally Financial Inc. Financial Overview

Table 10               The Bank of America Company Overview

Table 11               The Bank of America Financial Overview

Table 12               The Ford Motor Company Company Overview

Table 13               The Ford Motor Company Financial Overview

Table 14               Capital One Financial Corporation Company Overview

Table 15               Capital One Financial Corporation Financial Overview

Table 16               American Honda Finance Corporation Company Overview

Table 17               American Honda Finance Corporation Financial Overview

Table 18               General Motors Financial Company, Inc. Company Overview

Table 19               General Motors Financial Company, Inc. Financial Overview

Table 20               JPMorgan Chase & Co. Company Overview

Table 21               JPMorgan Chase & Co. Financial Overview

Table 22               Pentagon Federal Credit Union Company Overview

Table 23               Pentagon Federal Credit Union Financial Overview

Table 24               Toyota Motor Credit Corporation Company Overview

Table 25               Toyota Motor Credit Corporation Financial Overview

 

Market Segmentation

By Vehicle Type

  • Hatchback

  • Sedans

  • SUVs

  • Sports Utility Vehicles

  • Multi-purpose Vehicles

By Financier

  • OEM

  • Banks

  • NBFCs

By Percentage of Amount Sanctioned

  • Up to 25%

  • 25-50%

  • 51-75%

  • Above 75%

By Tenure

  • Less than 3 years

  • 3-5 years

No data available

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