North America Used Car Financing Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The North America Used Car Financing Market is segmented by Car Type (Hatchbacks, Sedans, Sports Utility Vehicle, and Multi-purpose Vehicle), by Financier (OEM, Banks, and Non-Banking Financing Companies), and by Country (United States, Canada, Mexico, and Rest of North America). The report offers the market size and forecasts in value (USD billion) for all the above segments during the forecast years.

North America Used Car Financing Market Size

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North America Used Car Financing Market Summary
Study Period 2019 - 2029
Base Year For Estimation 2023
Forecast Data Period 2024 - 2029
Historical Data Period 2019 - 2022
CAGR 8.26 %
Market Concentration Medium

Major Players

North America Used Car Financing Market Major Players

*Disclaimer: Major Players sorted in no particular order

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North America Used Car Financing Market Analysis

The North American Used Car Financing Market is valued at USD 259.71 billion and is expected to reach USD 413.23 billion over the coming five years, with a combined CAGR of 8.26% during the same period.

During COVID-19, North America's used car financing witnessed a steady decline, owing to the spread of the virus, and people avoided purchasing cars amid an economic slowdown. In addition, markets, showrooms, and auction events were closed as strict lockdown measures were imposed by the regional government. Although, after Q1 2021, everything was again on track, with the used car financing business back to a growth phase again.

The region is dominated by luxury case sales, which has been the key factor driving the used car financing marketplace. The consumer who opts to purchase luxury cars looks for a used car option to witness a reduction in the overall cost. This has helped the financiers to offer better interest rates and get ownership of the same. Several factors have influenced the growth of the market, including the pandemic, changing demographics and ambitions, the addition of first-time buyers, and the availability of various financing options by companies across the used car landscape.

Considering these factors, the United States is anticipated to hold the highest growth rate in the used car financing market in North America. People in the United States exhibit the highest income and are more exposed to owing luxury sedans in the used car segment. This has elevated the combined demand for financing services to ease the financial burden on individuals.

Considering these factors, the demand for used car financing in North America is expected to witness a high growth rate during the forecast period.

North America Used Car Financing Market Trends

This section covers the major market trends shaping the North America Used Car Financing Market according to our research experts:

OEM based Financing to Gain Traction

OEM-certified used cars are getting traction among consumers. Different dealer channels are emerging in North America and consumers refer to them in the view of greater quality, longer-term assurance, and better sales reliability.

By working with multi- and auto-financing businesses, OEM-certified used car dealers reduce their exposure to buyers' financial concerns. Cars older than ten years are not eligible for financing because of their reduced lifespan, increased risk of damage, and diminished value. When compared to new car purchases, there is a higher proportion of cash payments because the price can be 20-30% lower.

North American countries, including the United States, Canada, and Mexico, have more than 200 multi-finance companies, with auto and bank-owned companies continuing to eat into market share. Bank-owned businesses can offer more competitive lending rates because of their parent firm's support, whereas auto-owned businesses can rely on strong dealer relationships. This has helped the OEM to understand and establish longer-term relations with the key financiers in the market, offering mutual growth opportunities of both companies in the used car marketplace. For instance, in July 2022, AutoNation, an American automotive retailer based in Fort Lauderdale, Florida, announced its plans to acquire the captive business of auto lender CIG Financial in order to support its standalone growth in the used vehicles financing landscape across the region.

Further, consumers over time have felt the risk of fraud has been increasing with the financing of these cars, thus they are likely to rely upon the OEM-based financiers available at the showroom in order to keep the process seamless. In addition, these financiers offer much more effective installment amounts at competitive interest rates. Moreover, the consumer feels safe and secured while availing financing services for the used cars from OEM as they offer better service and maintenance offers, along with attractive loan benefits together.

Thus, considering these potential advantages and factors, the OEM-based financing is expected to boost the demand for used car financing in North America during the longer-term forecast period.

North America Used Car Financing Market - Average Amount of Used Car Financing in United States, 2015-2022, Value in USD

Canada is Expected to Register a Higher CAGR

Canada has been the heart of the North American auto sector after the United States. The region holds immense potential for the growth of the used car marketplace. This became more predominantly visible post-COVID-19 when people became more concerned about their financial stability, which led them to own used cars instead of buying new cars owing to the cost affordability factor. In addition, the regional market has flourished, with individuals looking for budget-friendly and comfortable cars, resulting in their growing interest in owning used SUVs. Further, the cost of SUVs has invited them to own them based on financing benefits from the used car retailers available across the country.

The growing consumer trend toward personal vehicles due to increased mileage and less dependence on public transport and car sharing is likely to increase the demand for used SUVs across the country. Cars, including Nissan, Ford, and General Motors, are most widely financed under the used car category in the region.

Coast Capital, Clutch Car Loan, Splash Auto finance, Go Auto, and CarsFast are some of the leading non-banking financial firms offering effective interest rates for used cars. These companies are offering loans for a period of 12-96 months based on the cost of the car, down payment, and interest rates. On similar lines, many major banks offer used car financing in Canada including Scotiabank, CIBC, TD Canada Trust, and BMO. The consumer can get their used cars easily financed from these banks on attractive EMI.

Moreover, OEM certified has gained much interest over used car financing, owing to consumer preferences, as a majority of used car buyers prefer OEM certified. Thus, these OEMs try to get the financing opportunity backed.

Considering these factors and advantages, the demand for used car financing in Canada is anticipated to have high potential during the forecast period.

North America Used Car Financing Market - Revenue Share (%) by Country, 2021

North America Used Car Financing Industry Overview

The market for used car financing across North America is moderately consolidated. The presence of many organized and unorganized players has created such a market scenario. Also, most auto manufacturers, apart from offering their own financing, have tie-ups with banks and other financial institutions, offering a wider choice for their customers. But the relatively easier procedures to procure a loan from various NBFCs are expected to tilt the market in their favor. Moreover, in the competitive arena, the majority of the used car financing business is ruled by banks and financial companies.

Financiers, including OEMs, banks, and NBFCs, have made strategic forefront in order to witness improved sales bars in the market. For instance, in September 2022, Mexico-based used car platform, Kavak, announced that it engaged USD 675 million in financing from HSBC bank to support its car loan offering.

North America Used Car Financing Market Leaders

  1. Ally Financial Inc.

  2. The Bank of America Corporation

  3. Capital One Financial Corporation

  4. Citigroup Inc.

  5. Royal Bank of Canada

*Disclaimer: Major Players sorted in no particular order

North America Used Car Financing Market Concentration
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North America Used Car Financing Market News

  • July 2022: MercadoLibre and Brazilian financial service provider. Creditas, announced the launch of their new partnership in order to extend their used car loans in Mexico. Under this partnership, the two companies will expand their semi-new offerings throughout Mexico, starting from the capital of Mexico City.
  • July 2022: ReCar, which is one of the used car platforms, announced the opening of its new used car Dealership in St. John's, Newfoundland, Canada. The company will offer used car financing, along with several other services, at this location.

North America Used Car Financing Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Porters Five Force Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION (Market Size in Value USD Billion)

    1. 5.1 By Car Type

      1. 5.1.1 Hachbacks

      2. 5.1.2 Sedan

      3. 5.1.3 Sports Utility vehicles (SUV)

      4. 5.1.4 Multi-Purpose Vehicle

      5. 5.1.5

    2. 5.2 By Financier

      1. 5.2.1 OEM

      2. 5.2.2 Banks

      3. 5.2.3 Non-Banking Financial Companies

    3. 5.3 By Country

      1. 5.3.1 United States

      2. 5.3.2 Canada

      3. 5.3.3 Mexico

      4. 5.3.4 Rest of North America

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles *

      1. 6.2.1 Ally Financial Inc.

      2. 6.2.2 JPMorgan Chase & Co

      3. 6.2.3 The Bank of America Corporation

      4. 6.2.4 Toyota Motor Credit Corporation

      5. 6.2.5 American Honda Finance Corporation

      6. 6.2.6 General Motors Financial Company, Inc

      7. 6.2.7 Capital One Financial Corporation

      8. 6.2.8 Citigroup Inc.

      9. 6.2.9 Royal Bank of Canada

      10. 6.2.10 HSBC Holdings plc

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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North America Used Car Financing Industry Segmentation

Used car financing is the service that offers used cars to consumers at much-lowered prices with affordable EMI installments. These installments are divided based on the loan amount and tenure with some fixed rate of interest.

The North American Used Car Financing Market is segmented by Car Type (Hatchbacks, Sedans, Sports Utility Vehicle, and Multi-purpose Vehicle), by Financier (OEM, Banks, and Non-Banking Financing Companies), and by Country (United States, Canada, Mexico, and Rest of North America). For each segment, the market sizing and forecasts have been provided on the basis of value (in USD million) and volume (in metric tons).

By Car Type
Hachbacks
Sedan
Sports Utility vehicles (SUV)
Multi-Purpose Vehicle
By Financier
OEM
Banks
Non-Banking Financial Companies
By Country
United States
Canada
Mexico
Rest of North America
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North America Used Car Financing Market Research FAQs

The North America Used Car Financing Market is projected to register a CAGR of 8.26% during the forecast period (2024-2029)

Ally Financial Inc., The Bank of America Corporation, Capital One Financial Corporation, Citigroup Inc. and Royal Bank of Canada are the major companies operating in the North America Used Car Financing Market.

The report covers the North America Used Car Financing Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the North America Used Car Financing Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

North America Used Car Financing Industry Report

Statistics for the 2024 North America Used Car Financing market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. North America Used Car Financing analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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North America Used Car Financing Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)