Overview

India Used Car Finance Market Competition and Emerging Trends

The competition in India's used car financing sector is intensifying as Non-Banking Financial Companies (NBFCs) and captive finance arms increase their market share, driven by the growing demand for affordable mobility solutions, higher digital adoption, and the widening price gap between new and used vehicles. The market is experiencing heightened activity in regions like Mumbai, Delhi NCR, Bengaluru, Hyderabad, and Kolkata, where digital adoption and vehicle affordability are key drivers. The pre-owned car segment has gained considerable traction, with the number of used car sales in FY'2023 (4.6 million units) surpassing new car sales (4.1 million units), signaling a shift toward value-driven mobility.

This market is transitioning toward more formalized structures, with an estimated 35% of the pre-owned vehicle market expected to be organized in the coming years. This change is propelled by consumers seeking verified cars, transparent financing options, and government initiatives strengthening the regulatory environment.

India’s used car finance sector is evolving, with contributions from traditional banks, NBFCs, captive finance divisions, and fintech firms. Leading players like State Bank of India (SBI), Axis Bank, ICICI Bank, Tata Capital, Sundaram Finance, and Cholamandalam Investment and Finance Company are increasing their used car loan portfolios, refining underwriting processes, and integrating technology for better loan processing.

Captive finance divisions like Toyota Financial Services and Mahindra Finance are amplifying their presence, while fintech platforms such as Cars24 Financial Services and Droom Credit are gaining ground by offering streamlined, tech-driven financing options to a younger, digitally savvy customer base.

The sector has seen increased investments, strategic alliances, and digital innovation, with companies leveraging AI-based credit scoring, enhancing distribution channels, and expanding their reach to underserved Tier 2 and Tier 3 cities. A key milestone was Mahindra Finance’s partnership in March 2023 with Car&Bike and Rupyy, launching the ‘Used Car Digi Loans’ platform. This fully digital service enables rapid loan disbursement, catering to the evolving needs of used car buyers.

As fintech startups and OEM-backed platforms continue to expand, the market will see intensified competition. Firms that focus on customer-centric innovation, robust dealer networks, and digitalized loan processing are poised to lead the growing landscape of India's used car financing market.

The market has recently witnessed notable mergers and acquisitions, partnership and investment activities, including

• In 2024, Tata Capital Limited signed a Memorandum of Understanding (MoU) with Maruti Suzuki India Limited to provide financing solutions for new and pre-owned vehicles across MSIL's brands, including Arena, Nexa, and Maruti True Value.
• In 2023, CarTrade Tech acquired OLX India's classifieds and auto sales business for INR 535.54 crore to strengthen its position in the used car market.

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Scope of India Used Car Finance Market Competitive Landscape

Makreo Research presents an insightful study titled “India Used Car Finance Market Competition Assessment Report 2025 – Market Share, Positioning, M&A, and Company Profiles,” providing a comprehensive analysis of the key financial institutions and captive lenders driving the growth of India’s rapidly expanding used car financing sector. The report offers a detailed competitive benchmarking of leading players such as State Bank of India (SBI), Axis Bank, Tata Capital Limited (TCL), Sundaram Finance Limited, Toyota Financial Services, Mahindra & Mahindra Financial Services, Maruti Suzuki True Value, and Cars24 Financial Services, among others.

The study initiates with a comparative evaluation of these companies based on crucial parameters, including market presence, loan tenure structures, and interest rate offerings. It delves into recent mergers and acquisitions, investment activities, funding rounds, and strategic alliances, shedding light on the changing dynamics of the competitive environment.

Moreover, the report provides company profiles, analyzing recent performance trends in the used car loan sector. It offers insights into how each player has adapted to shifts in consumer behavior, regulatory frameworks, and macroeconomic conditions. This data-driven, structured assessment serves as a valuable resource for stakeholders seeking to understand the competitive dynamics and growth opportunities in India’s used car financing market.

Competitive Landscape
This section offers a comparative analysis of the prominent players in India's used car finance market, evaluating them across key market parameters such as market presence, loan offerings, interest rates, and customer reach.

M&A/Investments and Funding Timeline
This section provides an overview of recent mergers, acquisitions, and investments among the listed companies, along with a timeline detailing the funding activities of key players in the market.

There are 15 players covered in this report. To know more, please reach out to sales@makreo.com