Auto Loan Market to Exceed $2.8 Trillion by 2031
A 2026 report from Mordor Intelligence projects the global auto loan market will surpass $2.8 trillion by 2031. Growth is being driven by strong demand for passenger vehicles, an expanding used-vehicle financing segment, and the increased accessibility of credit through digital lending platforms.
The U.S. auto loan market remains near historic highs, with outstanding balances hitting $1.655 trillion in the third quarter of 2025. Despite concerns about affordability, over 12.7 million new auto loans were originated in the first half of 2025, totaling approximately $381 billion in new financing. Longer loan terms have become a key feature of the market, with refinanced auto loans now averaging effective terms of 90.57 months, or just over 7.5 years. This trend helps consumers manage higher average vehicle prices, which reached $42,332 for new cars in Q3 2025, by lowering their monthly payments. Delinquency rates are stabilizing after several years of increases. TransUnion projects that serious delinquencies (60+ days past due) will be around 1.54% by the end of 2026, a slight increase from 1.51% at the end of 2025. This suggests that while delinquencies are elevated compared to pandemic-era lows, the rate of increase is slowing. The electric vehicle (EV) segment is significantly influencing financing trends, with EV financing growing by over 30% year-over-year in 2024. Leasing is particularly popular for EVs, accounting for nearly 45% of all new EV transactions in the third quarter of 2024 as consumers seek to avoid risks associated with battery depreciation and fast-changing technology. However, loans for EVs often carry higher interest rates and shorter durations compared to traditional vehicles. Fintech is rapidly transforming the industry landscape, with digital lending platforms and AI-powered underwriting gaining significant market share. While traditional banks held a 46.41% share of the car loan market in 2025, fintech providers are projected to grow at the fastest rate. This shift is driven by the demand for faster, more convenient online loan origination and servicing. Major players in the market include captive finance companies like Ford Motor Credit and Toyota Financial Services, large banks such as Ally Financial and Capital One, and emerging fintech firms. Regulators are increasing their focus on the sector, with heightened attention on collections practices, data accuracy in credit reporting, and the fair use of AI in lending decisions.
