India’s automotive aspirations are increasingly being financed by credit. In FY25 alone, 42.4 lakh auto loans were disbursed, painting a clear picture—owning a car in India today is largely a loan-driven journey. This article delves into the evolving dynamics of the auto loan market, the performance of various lenders, and emerging borrower behaviours based on the CRIF Highmark report How India Lends – June 2025.
Auto Loan Portfolio Shows Steady Growth
Auto loans have witnessed strong, stable growth over the past three years:
Portfolio Outstanding rose to ₹8.2 lakh crore in March 2025 from ₹7.1 lakh crore in March 2024.
Active Loan Accounts increased to 159 lakh, a YoY growth of 9.5%.
Delinquency metrics stayed stable:
PAR 31–90: 2.3%
PAR 91–180: 0.7%
PAR 181–360: 2.7%
PAR 360+: 2.6%
These figures indicate a healthy credit environment despite rising originations.
Slower but Steady: Growth Deceleration in FY25
After a bumper FY24, FY25 saw moderated auto loan growth:
Origination Value grew only 5.2% YoY to ₹359,507 crore.
Origination Volume grew by 2.1% YoY to 42.4 lakh loans.
This slowdown aligns with weaker consumer sentiment, rising car prices, and tapering post-pandemic enthusiasm.
Private Banks Lose Ground to PSU Banks and NBFCs
There has been a shift in lender dominance:
Private Banks’ share of originations by value fell from 32.0% to 28.6%.
Their share in volume dropped to 21.2%.
Meanwhile, PSU Banks grew their value share from 34.2% to 35.9%, overtaking NBFCs.
PSU banks appear to be leveraging trust, government salary accounts, and competitive rates to attract borrowers.
More Borrowers Opt for Big-Ticket Loans
A striking shift is visible in loan ticket sizes:
₹10 lakh+ loans now account for 49.1% of originations by value (up from 36.5% in FY22).
Loans in the ₹10–15 lakh and ₹20+ lakh segments showed particularly strong growth.
Meanwhile, loans under ₹5 lakh dropped in share from 43.7% in FY22 to 30.5% in FY25, signalling a consumer shift toward premium and mid-range vehicles.
NBFCs Face Delinquency Pressures
While PSU and private banks managed their portfolios prudently:
NBFCs saw early-stage delinquencies (31–90 days) rise to 4.16%, the highest among lender types.
Later-stage delinquencies (91–180 days) also increased, underlining rising credit risk.
The stress is more pronounced in loan sizes under ₹5 lakh, where affordability challenges are impacting repayment.
