3 Out Of 5 Indians Prefer Getting Their Car Financed: Cars24 Trends
Cars24, an online platform for buying and selling used cars, stated in a press release that its financial arm - Cars24 Financial Services (CFSPL) has witnessed a 100 per cent year-on-year increase in loan disbursements and has surpassed the milestone of Rs. 2,000 crore since inception.
As the company celebrates this milestone, they have also shared some insights into India's car financing landscape that will have a profound impact on the industry's future.
The trends observed in used car financing mirror those of new car financing, highlighting the evolving preferences and behaviours of car buyers.
Car Financing Trend Reaches Tier 3 Cities in India
♦ In non-metro cities, 75 per cent of Indians in Tier 2 and 3 cities are opting for the convenience of car financing, while even in bustling metro cities, 60 per cent of Indians have joined the car financing movement.
♦ The financing boom extends across cities, with Tier 1 markets such as Delhi-NCR, Bengaluru, and Hyderabad and Tier 2 cities like Lucknow, Surat, and Jaipur, witnessing significant loan uptake. Even Tier 3 cities like Patiala, Alwar, and Bharuch have joined the loan frenzy, making used car ownership more accessible across India.
♦ 3 out of 5 Indians prefer getting their car financed
♦ India is witnessing a notable trend with an increasing number of young individuals opting for car loans. The average age of people preferring to finance their cars stands at 32 years, indicating a strong presence of working millennials, including salaried employees and young entrepreneurs.
♦ With an average EMI ranging from ₹10,500 to ₹11,500 per month with a tenure of up to 72 months, car financing has become a viable solution for many. The data reveals that every 3 in 5 customers choose to finance their cars.
♦ The ease and accessibility of car financing have become key drivers in attracting more young individuals who are seeking financial flexibility and a hassle-free car ownership experience. With the advent of digitisation, the car financing industry has successfully adapted to the evolving needs of today's generation, making the dream of owning a car more attainable and fulfilling for tech-savvy youth.
♦ Over 60 per cent of first time car buyers prefer financing, it's more convenient they said!
♦ In the ever-evolving landscape of car ownership, another intriguing trend has emerged among first-time buyers in India - the preference for car financing. Aspiring car owners who are venturing into the realm of car ownership for the first time are increasingly opting for the convenience and flexibility of financing options. In fact, according to CFSPL’s data, over 60 per cent of first time car buyers have financed their cars in the last one year.
♦ This shift can be attributed to several factors, including the rising costs of vehicles, the desire for newer models with advanced features, and the availability of attractive loan packages tailored to suit the needs of first-time buyers.
Women Embrace Car Financing
♦ An encouraging trend in the car financing sector is the notable 45 per cent increase in loans disbursed for women every year. Traditionally, car financing has been predominantly associated with male buyers, but there has been a significant shift in recent years. More women are taking charge of their financial independence and embracing car ownership through financing options.
♦ This rise in women opting for car financing highlights the need for tailored financing solutions that cater to the unique preferences and requirements of women buyers.
Hatchback Models Lead the Way in Popular Car Financing Choices
Hatchback models such as Maruti Swift, Hyundai i10, and Renault Kwid have secured their place at the forefront of popular car financing choices. These vehicles have captured the attention and preference of car buyers looking for a cost-effective yet reliable transportation solution. These compact vehicles offer a cost-effective solution for individuals seeking car ownership, with lower price points compared to larger car segments.
Additionally, hatchbacks are known for their fuel efficiency, making them a practical choice for daily commuting and reducing overall ownership costs. With their combination of affordability and practicality, hatchbacks have become a top choice for individuals seeking car financing solutions.
The March of Loans: India's Car Financing Hits a Historic High in 2023
March 2023 marked a significant milestone in India's car financing landscape, with the highest loan disbursement recorded in a single month. According to CFSPL, Customers availed of loans amounting to Rs. 150 plus crore during this period, indicating a substantial surge in car financing. This trend aligns with previous years' data, where March consistently witnesses the highest number of cars being financed, showcasing a recurring pattern.
The remarkable increase in loan uptake during March can be attributed to various factors. Firstly, there is a growing desire among individuals to own personal vehicles, driven by the need for convenience, mobility, and independence. This aspiration fuels the demand for car financing as customers seek financial assistance to fulfil their dreams of car ownership. Additionally, March serves as an opportune time for car purchases due to several favourable factors. The commencement of the new financial year in India prompts individuals to make significant investments, including acquiring cars. Moreover, end-of-season discounts and promotional offers provided by car dealerships incentivise customers to finalise their purchases during this period.
Talking about the new milestone, Cars24 Co-founder & CFO, Ruchit Agarwal, said "We remain steadfast in our commitment to providing an exceptional and customer-centric experience, empowering individuals to fulfil their car ownership dreams with ease and satisfaction."
Highlights
● 75 per cent of individuals in Tier 2 and Tier 3 cities in India opt for car financing
● The average age of Indians securing car financing stands at 32 years
● Average EMIs for used cars range between IRs. 10,500-11,500
● 45 per cent year-on-year increase in loans disbursed to women
● Hatchbacks emerged as a popular choice for car financing
● March 2023 records the highest loan disbursement in a month
