The average passenger-vehicle loan size in India rose 49 per cent to ₹8.2 lakh between the first half of 2019 (H1 2019) and H1 2026, as buyers shifted towards higher-value vehicles, particularly sports utility vehicles (SUVs), and vehicle prices increased, according to a report by TransUnion CIBIL. The average repayment tenure increased by five months to 62 months over the period, indicating that borrowers were spreading repayments over longer periods to manage higher loan amounts.
“Car ownership is increasingly being shaped by a combination of aspiration and affordability. Consumers are choosing higher-value and feature-rich vehicles, while larger loan amounts and longer tenures are helping make these purchases more manageable,” said Bhavesh Jain, MD & CEO, TransUnion CIBIL.
The rise in loan sizes reflects both higher vehicle prices and a shift from entry-level cars to SUVs, said Rahul Kotabage, director and head of research and consulting at TransUnion CIBIL.
The trend is extending beyond metropolitan markets. Borrowers from semi-urban and rural areas accounted for 51 per cent of those financing upgrades to higher-value cars in H1 2026, up six percentage points from 2019. Rural originations among borrowers moving from two-wheelers to cars grew at a compound annual growth rate of 15 per cent from 2019, compared with 8 per cent for overall passenger-vehicle loan originations.
The active passenger-vehicle borrower base reached 25 million in June 2026, around 1.7 times the level in June 2019.
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Meanwhile, delinquency in loans 90-179 days past due declined by 95 basis points to 0.5 per cent. Used cars accounted for 24 per cent of passenger-vehicle loan originations in H1 2026. Of the ₹11 trillion in outstanding passenger-vehicle loans, ₹2 trillion to ₹2.5 trillion was attributable to used-car financing, according to figures shared during the briefing.
TransUnion CIBIL executives said they were not seeing incremental stress in the 30-plus-day and 60-plus-day delinquency categories. Delinquency trends for newer passenger-vehicle and two-wheeler loan vintages had also improved sequentially.
Non-banking financial companies (NBFCs) continued to gain ground in vehicle financing. Their share of live two-wheeler loans rose to 73 per cent in June 2026 from 63 per cent in 2019. In passenger-vehicle financing, NBFCs accounted for 37 per cent of live loans, up four percentage points. Public-sector banks had a 30 per cent share, while private-sector banks accounted for 26 per cent.
Portfolio quality in two-wheeler financing also improved, with delinquency declining to 1.4 per cent in June 2026 from 2.7 per cent in June 2019. The borrower base is also becoming more credit-experienced. First-time borrowers accounted for 39 per cent of two-wheeler loan originations in H1 2026, down 19 percentage points from 2019, while borrowers with more than two years of credit history accounted for 43 per cent, up 16 percentage points.
In passenger-vehicle financing, borrowers new to credit accounted for 10 per cent of originations in H1 2026, compared with 19 per cent in H1 2019. Borrowers moving from two-wheelers to cars accounted for 11 per cent of new passenger-vehicle loan originations.