India’s vehicle finance market is entering a phase of more segmented and diversified growth, with commercial vehicles and used cars emerging as key drivers, alongside a premiumisation trend in auto financing, according to CRIF High Mark’s latest report, Wheels and Ambition: A Research Report on India’s Vehicle Finance Landscape.

Commercial vehicle loans recorded a 20.1% five-year CAGR, rising to ₹7.4 lakh crore in June 2026 from June 2021, while used-car loans emerged as the fastest-growing segment, registering a 26.2% CAGR to ₹1.3 lakh crore during the same period.

The used-car segment also saw its borrower base expand 2.4 times to three million, underscoring its growing formalisation and emergence as a mainstream credit segment. Its share of total vehicle financing increased to 0.7% from 0.5% over the five-year period. Two-wheeler financing remains the largest borrower segment, with the borrower base increasing from around 23 million in June 2021 to 36 million in June 2026. The segment continues to attract new borrowers, with 80% of borrowers being new-to-product. Its share of total vehicle financing remained stable at 1.1%.

Auto loans are also showing signs of a premium-led recovery, with average exposure per borrower growing at a 9.2% CAGR between June 2021 and June 2026. The share of auto loans above ₹15 lakh increased from 27.6% in Q1 FY25 to 29.8% in Q1 FY27, pointing to a shift towards higher-value vehicles.

The average loan exposure per borrower rose to ₹7.8 lakh in June 2026 from ₹6.4 lakh in June 2021. For used cars, the average loan size increased to ₹4.2 lakh from ₹3.1 lakh, while the average two-wheeler loan exposure rose to ₹50,000 from ₹30,000 during the same period. “For used cars loans grew by 6.3% CAGR indicating rising premiumisation and used car growing as a stsructural credit segment, respectively,” the report said.

The findings point to a shift in India’s vehicle-finance market from a predominantly volume-led opportunity towards a more segmented growth market. Commercial vehicles offer strong macro-driven growth potential, used cars are emerging as a scalable opportunity, while premium auto and two-wheeler financing are creating avenues for value-led growth.

Overall vehicle-finance originations grew 17.1% year-on-year in Q1 FY27, supported by higher ticket sizes and continued volume growth across segments. The average auto-loan ticket size increased to ₹8.6 lakh, while used-car financing continued to attract new borrowers, with 75% of originations coming from new-to-product borrowers.

CRIF High Mark also highlighted the need for tighter bureau-level concentration checks amid rising average ticket sizes and active loans per borrower, as well as a growing multi-loan borrower cohort. “For instance, the share of borrowers with 2+ active loans in Commercial Vehicle Loans rose from 15.7% to 19.9% between Jun’21 and Jun’26,” it noted.