United Kingdome Car Loan Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The UK Car Loan Market is Segmented by Product Type (Used Cars and New Cars) and Provider Type (Banks, Non-Banking Financial Services, Original Equipment Manufacturers, and Other Provider Types). The report offers the value (in USD million) for the above segments.

UK Car Loan Market Size

UK Car Loan Market Summary
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Study Period 2019-2028
Base Year For Estimation 2022
Market Size (2023) USD 53.11 Billion
Market Size (2028) USD 73.10 Billion
CAGR (2023 - 2028) 6.60 %
Market Concentration Low

Major Players

UK Car Loan Market Major Players

*Disclaimer: Major Players sorted in no particular order


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UK Car Loan Market Analysis

The United Kingdome Car Loan Market size in terms of outstanding loan value is expected to grow from USD 53.11 billion in 2023 to USD 73.10 billion by 2028, at a CAGR of 6.60% during the forecast period (2023-2028).

  • The UK car loan market is a significant part of the overall consumer credit market. Various lending institutions, including banks, credit unions, and specialist finance companies, offer financing to consumers who want to purchase a car. Car loans are typically secured loans, which means that the lender uses the car as collateral in case the borrower defaults on the loan. This makes car loans less risky for lenders, which can result in lower interest rates for borrowers compared to unsecured loans.
  • In recent years, the UK car loan market has seen significant growth, driven by factors such as low-interest rates, increased consumer demand for cars, and the rise of online lending platforms. However, the COVID-19 pandemic had a significant impact on the market, with a drop in consumer demand for cars and increased economic uncertainty leading to a slowdown in lending activity.
  • Despite these challenges, the UK car loan market is expected to rebound in the coming years as the economy recovers and consumer demand for cars picks up.

UK Car Loan Market Trends

Low Interest Rates are Driving the Market

  • Low-interest rates have a significant impact on the car loan market in the UK. When interest rates are low, it means that borrowing money becomes more affordable, including taking out car loans. Low-interest rates encourage more people to finance their car purchases, as they can secure loans at lower costs and enjoy more favorable repayment terms.
  • With lower interest rates, monthly loan payments decrease, making it easier for individuals to afford a car loan. This stimulates demand for new and used cars, as consumers find it more attractive to finance their purchases rather than pay the full amount upfront. As a result, the car loan market experiences increased activity, with more people seeking loans to buy vehicles.
  • Financial institutions and lenders also benefit from this scenario. Lower interest rates incentivize borrowing, leading to more loan applications and business for banks. To remain competitive, lenders may offer attractive loan terms, such as longer repayment periods or lower down payment requirements, further driving demand in the car loan market. 
UK Car Loan Market: Average Interest Rates of Car Loans in UK, In %, 2022

Increased Consumer Demand for Cars

  • The increased consumer demand for cars in the UK is driving the car loan market in several ways. As more people seek to purchase cars, they may require financing to cover the cost of the vehicle. This has led to an increase in the number of car loan providers in the market, as well as the range of products they offer.
  • The demand for cars has also led to increased competition among lenders, which has resulted in lower interest rates and more attractive loan terms for consumers. This, in turn, has made car loans more accessible and affordable for a wider range of customers.
UK Car Loan Market: Net Percentage of Domestic Banks Reporting Stronger Demand for Car Loans, 2022-2023

UK Car Loan Industry Overview

The market for UK car loans is highly fragmented. Major players like Barclays Partner Finance, Santander UK, and Lloyds Bank dominate the market. Competition is expected to intensify by the end of the forecast period due to the lucrative opportunities available to various players in the market. 

The report highlights the numerous strategic initiatives, such as new business deals and collaborations, mergers and acquisitions, joint ventures, product launches, and technological upgrades, implemented by the leading market contenders to set a firm foot in the market. Hence, this section includes the company profiles of the key players and industry analysis.

UK Car Loan Market Leaders

  1. Barclays Partner Finance

  2. Santander UK

  3. Lloyds Bank

  4. Nationwide Building Society

  5. Royal Bank of Scotland

*Disclaimer: Major Players sorted in no particular order

UK Car Loan Market Concentration

UK Car Loan Market News

  • March 2023: AMS, the global talent solutions business, and Tesco Bank, which serves over 5 million customers in the United Kingdom, announced the establishment of a new 3-year partnership.
  • Feb 2022: Barclays announced a strategic partnership with global corporate venture builder Rainmaking to drive FinTech innovation. With the support of Rainmaking, Barclays will launch a new suite of initiatives targeted at FinTech founders across the globe.

Table of Contents


    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study




    1. 4.1 Market Overview

    2. 4.2 Market Drivers

      1. 4.2.1 Low Interest Rates are Driving the Market

      2. 4.2.2 Increased Consumer Demand for Cars

    3. 4.3 Market Restraints

      1. 4.3.1 Increase in Car Loan Interest Rates is Restraining the Market

      2. 4.3.2 Changing Mobility Trends is Restraining the Market

    4. 4.4 Market Opportunities

      1. 4.4.1 Increasing popularity of electric vehicles (EVs)

      2. 4.4.2 Collaborations between car manufacturers and lenders

    5. 4.5 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.5.1 Threat of New Entrants

      2. 4.5.2 Bargaining Power of Buyers

      3. 4.5.3 Bargaining Power of Suppliers

      4. 4.5.4 Threat of Substitutes

      5. 4.5.5 Intensity of Competitive Rivalry

    6. 4.6 Insights of Technology Innovations in the Market

    7. 4.7 Impact of COVID-19 on the Market


    1. 5.1 By Product Type

      1. 5.1.1 Used Cars (Consumer Use & Business Use)

      2. 5.1.2 New Cars (Consumer Use & Business Use)

    2. 5.2 By Provider Type

      1. 5.2.1 Banks

      2. 5.2.2 Non-Banking Financial Services

      3. 5.2.3 Original Equipment Manufacturers

      4. 5.2.4 Other Provider Types (Fintech Companies)


    1. 6.1 Market Concentration Overview

    2. 6.2 Company Profiles

      1. 6.2.1 Barclays Partner Finance

      2. 6.2.2 Santander UK

      3. 6.2.3 Lloyds Bank

      4. 6.2.4 Nationwide Building Society

      5. 6.2.5 Royal Bank of Scotland

      6. 6.2.6 Close Brothers Motor Finance

      7. 6.2.7 Black Horse Finance

      8. 6.2.8 MotoNovo Finance

      9. 6.2.9 Moneybarn

      10. 6.2.10 Zopa*

    3. *List Not Exhaustive


UK Car Loan Industry Segmentation

A car loan, also known as an auto loan or vehicle loan, is a type of financing provided by a financial institution or lender to help individuals purchase a car.

The UK car loan market is segmented by product type (used cars and new cars) and provider type (banks, non-banking financial services, original equipment manufacturers, and other provider types).

The report offers the value (in USD million) for the above segments.

By Product Type
Used Cars (Consumer Use & Business Use)
New Cars (Consumer Use & Business Use)
By Provider Type
Non-Banking Financial Services
Original Equipment Manufacturers
Other Provider Types (Fintech Companies)

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Frequently Asked Questions

The UK Car Loan Market size is expected to reach USD 53.11 billion in 2023 and grow at a CAGR of 6.60% to reach USD 73.10 billion by 2028.

In 2023, the UK Car Loan Market size is expected to reach USD 53.11 billion.

Barclays Partner Finance, Santander UK, Lloyds Bank, Nationwide Building Society and Royal Bank of Scotland are the major companies operating in the UK Car Loan Market.

UK Car Loan Industry Report

Statistics for the 2023 UK Car Loan market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. UK Car Loan analysis includes a market forecast outlook to for 2023 to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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