CV loans grow at 20% CAGR; used-car finance emerges fastest-growing segment: Report – ET Auto

CV Loan Expansion: Commercial Vehicle Finance Expands 20% CAGR as Used-Car Segment Emerges Fastest Growing Sector

Commercial vehicle loans demonstrated a 20.1% five-year compound annual growth rate (CAGR) between June 2021 and June 2026, setting the pace for expansion across India’s entire vehicle financing ecosystem, according to CRIF High Mark’s research report.

The findings reveal the used-car loan segment as the fastest-growing category, achieving a 26.2% CAGR over the same period. Borrower counts in this sector increased 2.4 times, signaling strong formalization and mainstream adoption of used vehicles as credit-backed purchases.

“India’s vehicle finance market is entering a phase of specialized growth patterns, with commercial vehicles and used cars driving market expansion, alongside accelerating premiumization trends in auto financing,” noted industry analysts in the report.

While two-wheelers remain dominant in borrower volume, the sector saw active borrower numbers grow from approximately 2.3 crore in June 2021 to 3.6 crore in June 2026. Notably, 80% of new borrowers in this category represent first-time credit users.

Lending patterns show a clear shift toward higher-value transactions, with average borrower exposure increasing at a 9.2% CAGR between June 2021 and June 2026. The proportion of high-value auto loans exceeding Rs 15 lakh rose from 27.6% in Q1 FY25 to 29.8% in Q1 FY27, reflecting growing consumer purchasing power.

“Commercial vehicle financing stands as the sector’s primary growth engine, while used-car finance represents its fastest formalizing opportunity,” emphasized the research team.

Vehicle loan originations grew 17.1% year-on-year in Q1 FY27, driven by expanded loan amounts and sustained transaction volumes across product categories. The average auto-loan ticket size reached Rs 8.6 lakh, with 75% of used-car financing originations in this period coming from borrowers new to the product.

Asset quality metrics indicate improving delinquency trends across segments. Auto loans maintain the lowest risk profiles, whereas commercial vehicle loans exhibit higher early-stage delinquency levels despite overall sectoral resilience.

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Multilayered borrower engagement trends show increasing concentration risks requiring enhanced bureau-level monitoring,” states the report. The data reveals that commercial vehicle borrowers with multiple active loans increased from 15.7% in June 2021 to 19.9% in June 2026, highlighting emerging complexity in credit relationships.

• Published On Aug 23, 2026 at 10:28 AM IST

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