Used Car Financing Market Size - By Lender, By Loan Type, By Vehicle Class, By Vehicle Type, By Loan Duration, By Vehicle Age, By Use, Growth Forecast, 2026 - 2035

Used Car Financing Market Size

The global used car financing market size was valued at USD 47.9 billion in 2025. The market is expected to grow from USD 49.5 billion in 2026 to USD 74.1 billion in 2035, at a CAGR of 4.6%, according to latest report published by Global Market Insights Inc.

Growth in disposable income creates opportunities for automotive manufacturers, resulting in more vehicle sales. Despite the growth in disposable income, buying a new car costs more, and that prevents buyers from purchasing it. However, the used car selling concept emerges where buying a new car is still a hesitation for people.
 

Financing and EMI give opportunities to people who desire to buy a car, which was previously a hesitation because of money, relocation and less use. Buying a used car by financing helps to fulfil the desire. Also, looking at the trend, finance companies are also providing flexible interest rates to ease the buy. Currently, the typical rate of interest is around 4.79% for 12-36 months and 5.29% for 37-60 months, as per the industry associations.
 

The Asia Pacific region makes up about half of the global market value, driven by China's large scale and India's fast-growing motorization along with the growth of organized retail. North America and Europe are well-established markets but still offer opportunities for digital growth strategies and insurance models designed for electric vehicles (EVs).
 

Used Car Financing Market Trends

The global market for used car financing is undergoing a transformation with the introduction of technology and new consumer behaviors that are modifying the approval, pricing, and management of loans. Instant pre-approval along with alternative data is speeding up the loan process and making it easier thereby raising the number of loans sanctioned through dealers and online platforms.
 

Dealers report that instant pre-approval raises the percentage of loan approvals by 15-25%. At present, the digital loan applications account for 30-40% of the total applications. This transition has made it possible for lenders to approve and disburse loans in minutes rather than days. Within the next 2-3 years, digital tools and dealer systems are likely to bring pre-approved offers into the spotlight, thus facilitating quicker and easier loan processing.
 

Moreover, the competition in the market is being altered by subscription services along with online platforms. The programs, which target vehicles that are 2-4 years old, integrate financing with insurance and maintenance, providing a flexible option for car ownership. To these programs lenders are making shorter-term loans with guarantees supporting them.
 

SUVs account for around 62% of the total new car sales in the main markets, which has an influence on the kinds of used cars that are available and also on the preferences of the lenders when it comes to the collateral. Simultaneously, older electric vehicles (EVs) have started to come into the second-hand car market.
 

Used Car Financing Market Analysis

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Based on lender, the used car financing market is divided into banks, NBFCs, OEM captive finance companies and others. The banks segment dominated the market with 52.3% share in 2025.
 

• Banks, the private ones and the public ones are the ones that mainly take part in the used car financing market, dominating it with a combined market share of more than 50%. The segment represented by the banks is worth USD 25 billion in 2025, which is approximately 52.3% of the entire market then.
   
• There are several reasons for this market power, namely, their ability to take deposits at very low costs, their extensive branch and online networks, and their specialization in low-risk lending. The borrowers in this case are typically those who go for 80-90% loan-to-value ratio loans and 36-72 months repayment periods.
   
• Non-bank financial companies (NBFCs) are the second-largest market players after the banks. NBFCs primarily cater to subprime and near-prime borrowers (who banks usually do not deal with) thus providing them with loans. New and used cars get higher loan-to-value ratios from NBFCs since predicting vehicle values is easier and less paperwork is involved.
   
• Even if OEM captive finance companies are comparatively smaller in size, they are the quickest ones to grow in the used car financing market. The segment is projected to grow at the highest CAGR of 6.5% during 2026-2035. Vehicle manufacturers are offering financing services to their customers, which helps to create a trust relationship between both the OEM and the customer.
   
• The ‘Others’ segment, which has a smaller share of about 5% of the market, includes credit unions, buy-here-pay-here dealers, and peer-to-peer or platform lenders. However, these players play a critical role in niche and local markets.
   

Learn more about the key segments shaping this market

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Based on loan type, the used car financing market is segmented into secured loans, unsecured loans and lease financing. The secured loans segment substantially leads the market with its 75.3% revenue share in 2025.
 

• Secured loans are a favorite option as the car will be the collateral, thus the lenders will have less risk. Good credit customers will then qualify for more extended loan periods and cheaper rates. For the lenders, secured loans guarantee the repossession of the asset, if necessary, on the other hand, the borrowers are presented with the best financing options. Hence, secured loans are the backbone of the market.
   
• Unsecured loans, which make up around USD 4.6 billion or 9.6% of the total market, are mainly provided to a limited number of borrowers. These loans appeal to individuals who have good credit ratings and who are looking for leniency and trouble-free processing as the car is not used as collateral.
   
• Nevertheless, the nonexistence of collateral is responsible for the high interest rates and short repayment periods that are associated with these loans, thus making them less attractive. They are often used either to purchase low-priced cars or by borrowers who require quick approvals. The development of this segment is slow because of the risk involved for lenders and the preference for secured loans.
   
• By 2025, leasing will amount to around USD 7.2 billion, which is equal to 15.1% of the market share, and its growth rate will be the highest among all market segments. Leasing also provides lower monthly payments that are 20-30% cheaper than those of conventional loans, thus attracting cost-sensitive customers who like to own for shorter periods.
   
• Among the segments, unsecured loans will experience the slowest growth with a CAGR of 2.8% as the higher risk and cost remain the main drawbacks. On the contrary, lease financing will double the growth rate of unsecured loans with a CAGR of around 5.9% as the used car market is changing by CPO programs and electric vehicles (EVs). This indicates a mix of secure lending and flexible options, which is typical of a maturing market.
   

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The US used car financing market reached USD 8.3 billion in 2025, growing from USD 7.9 billion in 2024.
 

• The financing market for used cars in the United States is still very much active as buyers seek lower-priced alternatives and take advantage of different financing institutions. Used cars have become the primary means of transportation in the U.S. for many people as new car prices remain high. Thus, the demand for financing is stable.
   
• This trend attracts banks, credit unions, and captive finance companies which are willing to finance consumers with diverse credit ratings, i.e., prime, near-prime, and subprime. The competition among the lenders and the large number of people getting credit keep the market lively and expanding.
   
• The stable financing environment is being influenced by price changes along with market growth. One factor that has assisted buyers this year is the decrease in wholesale used car prices, which has been 15.6% so far. Thus, it has reduced the total amount buyers have to finance.
   
• U.S. plays smartly by integrating technologies to improve the financing process. Such digital platforms help lenders quickly and accurately assess loan applications. This makes financing easier for consumers and allows lenders to offer personalized loan terms based on risk, increasing profits and reducing the chance of defaults.
   

The North America region is growing at the fastest CAGR of 7% in the forecasted period between 2026 and 2035.
 

• In 2024, the North American used car financing market experienced a 1.7% increase in sales, totaling 4 million units. The combination of increased sales and decreased buying costs is very favorable for financiers, causing the market to be prepared for the use of digital tools and data analysis improvements, despite the fact that interest rates continue to rise.
   
• By 2025, North America's used car financing market is expected to reach about USD 9.1 billion, growing at a rate of around 7% CAGR until 2035. This growth is driven by easier access to credit and more digital financing options. The United States is at the forefront of the area, representing 91% of the total market, due to the penetration of financing at the rate of 38% and the sturdy cooperation between dealers and lenders.
   
• The financing market of used cars in Canada constitutes nearly 8.8% of the total value of the area with high-costs of financing and competitive pricing. The enhancement of customer experiences through CPO programs and instant pre-approvals is giving an edge to banks, finance companies, and fintech.
   

The Europe used car financing market generated revenue of USD 11.8 billion in 2025 and is anticipated to grow at the CAGR of 3.2% in the forecast period between 2026 and 2035.
 

• The Europe used car financing market is estimated to hold 22.6% of the market, making it the second largest region, with a market value accounting for USD 10.8 billion in 2025. As compared to other regions, Europe grows at a lesser rate, around 3.2% between 2026 and 2035.
   
• Regions stimulating the demand are electrification and changes in emission standards. Germany remains the market leader with almost a third of the total market, while the other major countries are the UK, France, Italy, and Spain.
   
• With more electric vehicles (EVs) on the road and changing policies, lenders are focusing more on battery warranties and the future value of specific models. As a result, the market in Europe is growing steadily. Eastern Europe, in particular, has room for growth as vehicle ownership and financing options continue to expand.
   

Germany's used car financing market is growing quickly in Europe, with a strong CAGR of 4.3%.
 

• Used car prices have increased by 33.5% since 2020, much higher than the 16% rise in new car prices. This highlights the importance of financing. The price gap is due to supply shortages in the automotive industry, which have raised the value of used cars.
   
• The price of used cars goes up, and at this point the German buyer requires the support of installments and OEMs back funding. These means are now indispensable in the process of car affordability. The scenario puts the banking industry in the spotlight as an essential player in making personal mobility accessible in Germany, even at a higher price.
   
• In September 2025, new car registrations in Germany rose by 12.8 percent to 235,528 vehicles. Which means there will be more opportunities for the used car market players in coming years.
   
• The interplay of great demand, constrained supply and escalating prices results in a very competitive situation for used cars lending across the country. Credit banks and OEM captive finance arms are significant for market stabilization. With regulators like BaFin overseeing the process, these institutions manage to keep the credit flow continuously. Even though lower registrations indicate difficulties in the market, the demand for loans for purchasing costly used cars has increased.
   

The Asia Pacific used car financing market accounted for USD 23.8 billion in 2025, and it is anticipated to grow at a CAGR of 4.2% during the analysis timeframe. The main factors contributing to this growth are rapid urbanization and increased incomes.
 

• The used car financing market of China is at the forefront with nearly 37% of the regional value, while the market of India is rising through the establishment of better-organized dealerships and the facilitation of credit access.
   
• The coming years are going to see the growth of the market in the Asia Pacific region as the government-backed financial systems and digital underwriting will be capable of providing services even to smaller cities.
   

China is estimated to grow with a CAGR of 3.9%, in the Asia Pacific used car financing market.
 

• China’s new car sales reached about 23 million in 2024, and thus they were responsible for 31% of the total car sales worldwide. This situation further bolsters the country's automotive market and, moreover, the used car financing market. Government interventions, such as ending the transfer restrictions between different regions and changing the Loan-to-Value (LTV) ratio for used cars, have facilitated the market and given the consumers a much simpler way to purchase used cars.
   
• While a significant number of vehicles in China are getting old, the soaring sales of new cars cause the owners to either up-grade or throw away their outgoing vehicles which consequently makes the market run with better-quality used cars that are newer. This situation enhances the value of the collateral for the banks and at the same time, it creates confidence in second-hand cars among the consumers.
   
• Middle-class people, who consider the affordability of these new used cars to be a main reason for buying them, most of the time take loans to purchase. The practice of standardized appraisals and valuations is also lowering the risks of lenders, thus making the used car market more attractive to finance institutions like Auto Finance Companies (AFCs).
   

Latin America used car financing market accounted for USD 2.8 billion in 2025 and is anticipated to show lucrative growth over the forecast period.
 

• The used car financing sector in Latin America is developing and expanding as a result of the overall economic necessity, the shift in consumer purchasing manner, and the quick technology uptake in financial services. For the majority of people, particularly those belonging to the middle class, used cars seem to be the least expensive option to get a car.
   
• Depending on the country, citizens might rather go for the used cars instead of the new ones as the economic situation makes the high depreciation of new cars unreasonably expensive. Consequently, personal transportation becomes dependent on the used car market, which financing through traditional banks and new digital lenders is a part of.
   
• Banks and finance companies have the know-how and the infrastructure to provide loans that are competitive in pricing for these vehicles. The market is also open to new trends, such as used car subscriptions. This is an indicator that the market is geared toward accommodating the shifting mobility needs while still offering cheap transportation through used car financing.
   

Brazil is estimated to grow with a CAGR of 3.2% between 2026 and 2035, in the Latin America used car financing market.
 

• The Brazilian used car financing sector is experiencing a surge owing to the combined effect of customer requirements and credit being available at low interest rates, which makes it an attractive choice for the buyers. Besides, the new car market is affected by high taxation and production costs. Thus, the consumers usually opt for second-hand vehicles which are cheaper. The demand for pre-owned cars thus creates a greater need for financing.
   
• Moreover, an additional reason for the above may be attributed to the country's solid and competitive financial system. The well-established banks, such as Banco do Brasil, Itaú, Bradesco, and Santander, are the main players in the car financing market.
   
• These banks have established many branches in all the places and have years of expertise, enabling them to supply loans even in areas that are hard to access. The government policies and regulations overseen by the Central Bank of Brazil are also pro-market.
   
• The market is also supported by socio-economic transformations, such as urbanization and a burgeoning middle class. With the development of cities, more and more people require personal vehicles to travel long distances to their workplaces.
   

The Middle East and Africa accounted for USD 1.3 billion in 2025 and is anticipated to show lucrative growth over the forecast period.
 

• As a result of urbanization and weak public transportation in the region, the necessity for cars grows even more. For some, the financing option is a must for coping with the huge initial expenses of purchasing a car. Lending institutions and non-banking companies (NBFCs) are fulfilling this need by providing flexible financing for the second-hand cars, thus bringing them closer to the customers.
   
• The market has become more transparent and efficient due to the online platforms and classifieds. The buyers are allowed to access a wider range of vehicles by these platforms and digital financing options are included as well, thus making the buying and loan process simple.
   
• There is a regular inflow of high-quality used cars, which mainly come from corporate and rental fleets with shorter replacement cycles, meaning that there will always be sought-after vehicles. The car ownership in the region is regarded as a status symbol, this consistent inflow of cars and the availability of good financing options continue to attract demand.
   

UAE to experience substantial growth in the Middle East and Africa used car financing market in 2025.
 

• The price range of around USD 2,700 to USD 16,000 is a good reflection of the affordability issue and the large expatriate population, which are two key factors driving the UAE Used Car Financing Market. It is also a price range that gives the opportunity to people who are looking for reasonably priced transport to meet their needs.
   
• Many expats, typically on short or medium-term contracts, will require the use of a car, but will not want to spend a large amount of money on a new car. Hence, financing options such as monthly plans with no large down payment are preferred as they help customers avoid paying a lot upfront.
   
• With the UAE’s consistent economy and high-income earners, the trade-ins and off-lease vehicles are always available and contribute to the strong inventories. This price range offers more than just affordability, it is an indicator of the financing system that has been well developed and caters to the demand for reliable, high-quality used cars.
   

Used Car Financing Market Share

The top 7 companies in the used car financing industry are Wells Fargo, CarMax Auto Finance, Ford Motor Credit Company, Capital One Auto Finance, BMW Financial Services, Carvana and GM Financial, contributing 25.4% of the market in 2024.
 

• Wells Fargo offers fixed-rate loans for used cars through their approved dealerships. These loans help customers manage their budgets with regular monthly payments. They work closely with dealers to make the process easy.
   
• CarMax Auto Finance provides financing for used cars bought from CarMax. Customers can pre-qualify online quickly. This makes it simple to choose and finance a car with clear terms.
   
• Ford Motor Credit Company provides loans for new, used, and certified pre-owned Ford and Lincoln vehicles through their dealers. They offer fixed payments with flexible terms, helping customers own their vehicles.
   
• Capital One Auto Finance offers loans for used cars bought at certain dealerships. Customers can check pre-qualification terms online without affecting their credit score. Their Auto Navigator tool helps customers find cars and see financing options upfront.
   
• BMW Financial Services offers loans for new and certified pre-owned BMWs. They also have programs like Easy Drive Financing, which can lower monthly payments by including a Guaranteed Future Value.
   
• Carvana provides loans for used cars sold on their online platform. They accept all credit types and allow pre-qualification without a hard credit check. The entire car buying process is online and hassle-free.
   
• GM Financial offers fixed-rate loans for used GM vehicles, including Chevrolet, Buick, GMC, and Cadillac. They work with GM dealerships to provide competitive rates and flexible terms for buying pre-owned vehicles.
   

Used Car Financing Market Companies

Major players operating in the used car financing industry are:
 

• Ally Financial
• Wells Fargo
• BMW Financial Services
• Capital One Auto Finance
• CarMax Auto Finance
• Carvana
• JPMorgan Chase
• GM Financial
• Ford Motor Credit Company
• Toyota Financial Services
  
   
• Wells Fargo uses its large dealer network and reputation as a major bank to increase loan volume. Its strategy is to offer a wide range of loan products for different credit profiles and build strong, steady relationships with dealerships, which are their main source of loan originations.
   
• CarMax Auto Finance focuses on funding only vehicles sold through CarMax, creating a simple, one-stop buying experience. Its strategy is to use sales data to manage credit risks and provide quick, clear financing decisions at the time of purchase.
   
• Ford Motor Credit Company benefits from being Ford's finance arm, supporting certified pre-owned and used Ford/Lincoln sales. Its strategy is to align financing offers with Ford's sales goals, helping build customer loyalty and manage dealer inventory.
   
• Capital One Auto Finance stands out with its digital pre-qualification tool, Auto Navigator, which shows real loan terms without affecting credit scores. Its strategy is to use consumer credit data to price loans for both prime and non-prime customers and direct them to partner dealerships.
   
• BMW Financial Services focuses on premium and Certified Pre-Owned (CPO) BMWs, ensuring high-quality vehicles and repeat customers. Its strategy is to offer flexible options, like balloon financing, to lower monthly payments and encourage customers to upgrade within the brand.
   
• Carvana’s advantage is its fully online platform with home delivery and fixed pricing. Its strategy is to use technology and low costs to make the financing and buying process faster and easier than traditional dealerships.
   
• GM Financial, as General Motors’ finance arm, supports GM dealerships and their used vehicle inventory. Its strategy is to provide a variety of financial products for all credit levels, helping GM dealers close sales and increase financing rates.
   

Used Car Financing Industry News

• In November 2025, SIXT launched SIXTcarhub.com, a digital platform for selling used fleet vehicles. This platform is open to external partners, allowing them to sell vehicles from their fleets, including cars and commercial vehicles from leasing companies, banks, insurers, and OEMs.
   
• In October 2025, Jana Small Finance Bank, in partnership with Hotfoot Technology Solutions, introduced a digital platform for used car loans. Built on Hotfoot's Rapid.ai LOS Platform, it simplifies the process of applying for and approving loans for pre-owned vehicles.
   
• In September 2025, Hertz Car Sales launched an online car-buying platform at HertzCarSales.com. Customers across the country can now browse, finance, and buy vehicles online, making the process easier and more transparent.
   
• In December 2024, CaixaBank introduced ‘Facilitea Coches’, a portal for financing used vehicles. It is part of CaixaBank's "selectplace" platform, which provides financing options for various customer needs.
   
• In July 2024, CommBank partnered with carsales, a leading digital auto marketplace, and Vyro, an automotive retail platform provider, to launch a car buying service on the CommBank app. This service helps customers find, finance, and manage their next car and offers special discounts and benefits for electric vehicle (EV) purchases.
   

The used car financing market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn) from 2022 to 2035, for the following segments:

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Market, By Lender

• Banks
  • Private
  • Public 
• NBFCs
• OEM captive finance companies
• Others

Market, By Loan Type

• Secured Loans
• Unsecured Loans
• Lease Financing

Market, By Vehicle Class

• Economy Cars
• Mid-range
• Luxury Cars

Market, By Vehicle Type

• Sedan
• Hatchbacks
• SUVS

Market, By Loan Duration

• Short-term (12-36 months)
• Medium-term (37-60 months)
• Long-term (Above 60 months)

Market, By Vehicle Age

• Newer (Upto 3 years)
• Older (Above 3 years)

Market, By User

• Individuals/consumers
• Businesses/commercial

The above information is provided for the following regions and countries:

• North America
  • US
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
  • Benelux
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Singapore
  • Malaysia
  • Indonesia
  • Vietnam
  • Thailand
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Colombia 
• MEA
  • South Africa
  • Saudi Arabia
  • UAE
  • Turkey