Commercial vehicle loans post 20.1% five-year CAGR as used cars and auto premiumisation drive lending: report

New Delhi: Commercial vehicle loans recorded a 20.1 per cent five-year compound annual growth rate (CAGR) between June 2021 and June 2026, anchoring an expansion across India's vehicle lending sector, according to CRIF High Mark's research report.

The findings showed that the used-car loan category is the fastest-growing segment, registering a 26.2 per cent CAGR over the same five-year period. Borrower numbers in the used-car segment expanded 2.4 times, reflecting greater formalisation and its transition into a mainstream credit product.

"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," the report stated.


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Two-wheeler financing maintains the largest overall borrower volume. The active borrower count in this segment rose from approximately 2.3 crore in June 2021 to 3.6 crore in June 2026. The two-wheeler segment continues to introduce consumers to credit, with 80 per cent of borrowers identified as new-to-product.

Auto financing reflected a shift toward higher-value disbursements, as average exposure per borrower increased at a 9.2 per cent CAGR from June 2021 to June 2026. The share of auto loans exceeding Rs 15 lakh rose from 27.6 per cent in Q1 FY25 to 29.8 per cent in Q1 FY27.

"Commercial vehicle loans are the clearest growth engine," while used-car financing serves as the "fastest-formalizing opportunity."

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As per the report, overall vehicle loan originations rose 17.1 per cent year-on-year in Q1 FY27, driven by higher loan amounts and steady transaction volumes across segments. The average auto-loan ticket size reached Rs 8.6 lakh. In used-car financing, new-to-product borrowers accounted for 75 per cent of total originations during the period.

On asset quality, later-stage delinquency indicators show improvement across categories. Auto loans maintain the lowest risk profile, whereas commercial vehicle loans show comparatively higher early-stage delinquency.

"Average ticket sizes are rising, active loans per borrower are increasing in some segments (especially auto loans), and a growing multiloan borrower cohort among them suggests deeper lender relationships," the report highlighted.

The report added that these borrower trends also indicate a "need for tighter bureau-level concentration checks," citing an increase in commercial vehicle borrowers with two or more active loans from 15.7 per cent in June 2021 to 19.9 per cent in June 2026.