1 week ago
Vehicle Finance Grows as Commercial Loan Delinquencies Rise
A report looked at how people and businesses are borrowing money to buy vehicles.
Used car loans grew faster than all the other vehicle loan types.
Commercial vehicle loans also grew strongly, but they had the most early payment problems.
These early problems affected 4.1% of commercial vehicle loans in June 2026.
More serious late payments generally became less common across the different loan types.
The report also found that more borrowers now have several vehicle loans at the same time.
Larger auto loans and more expensive or electric two-wheelers are becoming more common.
Overall, the vehicle financing market continued to grow along with the wider retail lending market.
Commercial vehicle loans had the highest early-stage delinquency, with PAR 31-90 at 4.1% in June 2026.
Used car loans were the fastest-growing segment, expanding at a 26.2% CAGR from June 2021 to June 2026.
The overall vehicle finance portfolio grew at a 20.1% CAGR, broadly matching overall retail credit growth.
Later-stage delinquencies improved across most vehicle loan products, indicating a stabilising risk environment.
Borrowers with two or more active vehicle loans increased to 19.9% from 15.7%, especially among commercial vehicle borrowers.
- Who
- Vehicle borrowers and lenders, as assessed by CRIF High Mark.
- What
- A CRIF High Mark report found strong vehicle-finance growth alongside elevated early-stage delinquencies in commercial vehicle loans.
- Where
- When
- The report covers trends from June 2021 to June 2026, with some origination data from Q1FY25 and Q1FY27.
- Why
- Growth was driven especially by commercial vehicles and used-car financing, while the report flagged multiple active loans as a risk concern.
Growth and Stabilisation View
Risk and Credit-Quality View
Overall sector condition
Growth and Stabilisation View
CRIF High Mark described vehicle financing as healthy and broadly keeping pace with the expanding retail market.
Risk and Credit-Quality View
The report identified increased early-stage delinquencies in commercial vehicle loans as a warning sign.
Loan portfolio expansion
Growth and Stabilisation View
Used car loans grew at a 26.2% CAGR, while commercial vehicle loans grew at 20.1%, supporting overall market expansion.
Risk and Credit-Quality View
Rapid growth may increase borrower exposure, particularly as the share of borrowers with multiple active vehicle loans rises.
Delinquency trends
Growth and Stabilisation View
Later-stage delinquencies improved across most vehicle products, suggesting a stabilising risk environment.
Risk and Credit-Quality View
Commercial vehicle loans still recorded the highest PAR 31-90 at 4.1% in June 2026.
Key facts
- Commercial vehicle PAR 31-90
- 4.1% in June 2026, the highest among vehicle-finance products.
- Used car loan CAGR
- 26.2% between June 2021 and June 2026.
- Overall vehicle finance CAGR
- 20.1% between June 2021 and June 2026.
- Retail credit CAGR
- 19% over the same period.
- Vehicle finance share of retail portfolio
- 11.4% in June 2026, unchanged from June 2021.
- Multiple active vehicle loans
- The share of borrowers with at least two active loans rose to 19.9% from 15.7%.
- Later-stage delinquency
- PAR 91-180 fell to 0.6% for auto loans and 1.2% for two-wheeler loans in June 2026.
Quotes
CRIF High Mark
Credit rating agency providing the report
“"The vehicle financing sector is healthy and keeping pace with an expanding retail market, driven heavily by commercial vehicles and the formalization of the used car market, while auto loans lean toward premiumisation to recapture momentum."”
rediff.com
Sources
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