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Used-car finance outpaced new auto loans over five years: CRIF High Mark
Our read
India's used-car credit boom will shift from volume-led growth to risk-tiered lending, favoring organized dealers and prime borrowers while squeezing highly leveraged consumers.
For operators
Used-car retailers and dealer networks can benefit from rapidly expanding formal credit demand, but should prioritize lender partnerships with disciplined underwriting as borrower stress rises.
Watch
Changes in average loan-to-value, tenure, interest-rate spreads and approval rates for used-car financing.
The report,
CRIF High Mark reports India’s used-car finance portfolio grew faster than new auto loans over five years, despite higher delinquencies. Formal financing demand lifted used-car outstanding to Rs 1.3 lakh crore, while commercial-vehicle finance posted the second-fastest growth.
Reported figures
From the report. Source details below
| Auto loan outstanding grew at 17.6% CAGR to Rs 9.9 lakh crore from | Rs 4.4 lakh crore |
|---|---|
| Used-car loans overdue 31-90 days: | 3.1%; auto loans: 2.1% |
| Used-car loans overdue 91-180 days: | 1%; auto loans: 0.6% |
| Used-car borrowers with unsecured consumption loans: | 9.2%; auto-loan borrowers: 6.4% |
| Commercial vehicle finance grew at 20.1% CAGR to Rs 7.4 lakh crore from | Rs 3 lakh crore |
What to watch next
- 30-plus and 90-plus day delinquency trends for used-car loans versus new-auto loans.
- RBI or credit-bureau data on consumer unsecured-loan growth, leverage and delinquency roll rates.
- Used-car transaction volumes, residual-value trends and auction recovery rates for repossessed vehicles.
- Funding-cost movements and securitization appetite for auto-focused NBFC loan pools.
The counter-case
The case against this reading — not reported by the source.
The growth may reflect deeper formalization, longer loan tenures and refinancing rather than a durable surge in underlying used-car demand. A 26.2% CAGR from a smaller base can overstate the competitive opportunity, while higher early-stage delinquencies and unsecured-credit exposure suggest lenders may tighten underwriting, raise pricing or reduce approvals. That could curb loan-funded transactions and pressure used-vehicle prices, dealer volumes and NBFC credit costs.