Used-car finance outpaced new auto loans over five years, but delinquencies remained higher
CRIF High Mark data shows used-car finance outstanding grew at a 26.2% CAGR to ₹1.3 lakh crore in the five years to June 2026, ahead of auto loans’ 17.6% CAGR. Used-car loans also recorded higher 31–90 day and 91–180 day overdue rates than auto loans.
What happened
Crif High Mark · India’s used-car finance portfolio grew faster than new auto loans over five years, reaching ₹1.3 lakh crore, but showed higher early-stage
Key facts
- Used-car finance outstanding CAGR: 26.2% (June 2021-June 2026)
- Used-car finance outstanding: ₹1.3 lakh crore in June 2026, versus about ₹40,000 crore in June 2021
- Auto-loan outstanding CAGR: 17.6% (June 2021-June 2026)
- Auto-loan outstanding: ₹9.9 lakh crore in June 2026, versus ₹4.4 lakh crore in June 2021
- Used-car loans 31-90 days overdue: 3.1%; auto loans: 2.1%
- Used-car loans 91-180 days overdue: 1%; auto loans: 0.6%
- Used-car borrowers with unsecured consumption loans: 9.2%; auto-loan borrowers: 6.4%
- Commercial-vehicle finance CAGR: 20.1%
- Commercial-vehicle finance outstanding: ₹7.4 lakh crore, versus ₹3 lakh crore five years earlier
Why this matters
Acquirers and partners should target used-car finance platforms with differentiated underwriting, servicing, and recovery capabilities, as rapid balance-sheet growth is accompanied by materially higher credit-risk exposure.
What to watch
- Whether 31–90 day used-car overdues migrate into the 91–180 day bucket over the next two quarters.
- Changes in RBI-regulated lender provisioning, risk-weight practices or internal loan-to-value limits for used vehicles.
- Used-car price indices and auction recovery values, particularly for vehicles older than five years.
- NBFC funding costs, securitisation spreads and warehouse-line availability for vehicle-finance originators.
- Growth in dealer-originated versus direct digital used-car loans and any deterioration in specific dealer cohorts.
- Evidence of rising repossessions, restructuring, write-offs or collection costs in lender quarterly disclosures.
- Banks are likely to preserve new-car lending as the lower-risk anchor while routing marginal used-car demand toward NBFC partners or higher-yield loan products.
- Used-car lenders will increase risk-based pricing, vehicle-age caps, loan-to-value discipline and dealer-level underwriting controls rather than broadly exiting the segment.
- Large used-car marketplaces and organised dealers may expand embedded finance, warranties, insurance and buyback products to protect conversion while improving collateral recovery economics.
- Collection intensity, repossession readiness and remarketing partnerships will become more important operating differentiators for lenders with rapidly growing used-car books.
- Borrowers with thin credit files may shift toward longer-tenure, higher-cost financing or delay purchases, reducing affordability for lower-ticket vehicles.