Australia Car Finance Market Research Report Information By Finance Type (Direct Financing (Loans from Banks, Credit Unions), Indirect Financing (Dealer Financing, Captive Finance Companies), Leasing Options (Operational Leasing, Financial Leasing), Personal Contract Purchase (PCP), Hire Purchase), By Vehicle Type (New Cars, Used Cars, Commercial Vehicles), By Loan Type (Secured Car Loans, Unsecured Car Loans), By Distribution Channel (Banks & Financial Institutions, Online Platforms & Marketplaces, Car Dealerships, Credit Unions), By End-U

 Australia Car Finance Market Overview

The Australia Car Finance Market was valued at USD 14.02 Billion in 2024. The Car Finance Market industry is projected to grow from USD 14.33 Billion in 2025 to USD 19.08 Billion by 2035, exhibiting a compound annual growth rate (CAGR) of 3.1% during the forecast period (2025-2035).

The increased vehicle sales and flexible financing options, rising debts owed to various borrowers are driving the growth of the Car Finance Market.

 FIGURE 1: AUSTRALIA CAR FINANCE MARKET VALUE (2019-2035) USD BILLION

 Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review

Australia Car Finance Market Opportunity

EMERGING CAR FINANCE MARKETS

Emerging car finance markets in Australia offer considerable growth opportunities for the industry, owing to changing customer preferences, technology advancements, sustainable vehicles, and government incentives. These marketplaces cater to a wide range of segments, including electric vehicles (EVs), used automobiles, and flexible ownership models, all of which are changing the traditional automotive financing environment. The increasing popularity of electric vehicles suggests promising business potential. Consumers are shifting to greener options as environmental awareness rises and government programs like tax reductions and subsidies for EV sales are enacted. 

Financial institutions are capitalizing on this trend by offering EV buyers bespoke services like low-interest loans and green financing choices. For example, Tesla financing packages have been in high demand, indicating a broader customer interest in environmentally friendly automotive options. The Commonwealth Bank of Australia (CBA) has released data indicating a rise in the number of young Australians seeking finance for "sustainable vehicles" such as hybrids and electric vehicles (EVs). 

Another key driver of growth is the used car market. Economic instability and rising new car prices have led many Australians to opt for used vehicles, which frequently require accessible financing solutions. Non-bank lenders and fintech companies are actively serving this segment with innovative loan packages for pre-owned vehicles, such as low-deposit and fast-approval options. Furthermore, flexible ownership options, such as car subscriptions and leasing, are gaining popularity, especially among younger clients and city dwellers.

Australia Car Finance Market Segment Insights

Car Finance by Finance Type Insights

Based on finance type, the market is segmented into Direct Financing (Loans from Banks and Credit Unions), Indirect Financing (Dealer Financing and Captive Finance Companies), Leasing Options (Operational Leasing and Financial Leasing), Personal Contract Purchase (PCP), and Hire Purchase (HP).The Indirect Financing segment dominated the market in 2024, while the Personal Contract Purchase (PCP) segment is projected to be the fastest–growing segment during the forecast period. 

The indirect segment accounted for the largest market share in 2023, indirect financing involves obtaining car financing through intermediaries, such as car dealerships, which act as a bridge between borrowers and lenders. In this model, dealerships partner with banks, credit unions, or other financial institutions to arrange loans on behalf of the buyer. This approach offers convenience, as borrowers can secure financing and purchase a vehicle in a single transaction. 

Dealers often have relationships with multiple lenders, enabling them to present various financing options tailored to the buyer’s needs. This streamlines the process, especially for individuals unfamiliar with comparing loan offers. However, indirect financing may come with added costs. Dealerships may include markups on interest rates as compensation for their services, resulting in higher overall financing costs compared to direct loans.

Car Finance by Vehicle Type Insights

Based on vehicle type, the Australia car finance market has been segmented into New Cars, Used Cars, and Commercial Vehicles. The New Cars segment dominated the Australia market in 2024, while New Cars segment is projected to be the fastest–growing segment during the forecast period. The new vehicles’ segment accounted for the highest market share and is expected to grow at a CAGR of 3.2% during the forecast period. 

New vehicles have never been registered in the market or owned by a single person. Additionally, new vehicle owners must purchase long-term third-party auto insurance for cars valid for three or five years. Manufacturers, distributors, or dealers offer numerous features to customers who finance new cars because they have numerous connections to other market players. A manufacturer or dealer transfers a new vehicle to a customer for the first time. New vehicle sales growth via car financing in the market is driven by demand for customized financing options for auto loans and additional bundled products like insurance and discounts.

FIGURE 2: AUSTRALIA CAR FINANCE MARKET SHARE BY VEHICLE TYPE 2024 AND 2035 (USD BILLION)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Car Finance by Loan Type Insights

Based on Loan Type, the Australia car finance market has been segmented into Secured Car Loans and Unsecured Car Loans. The Secured Car Loans segment dominated the Australia market in 2024, while the Secured Car Loans segment is projected to be the fastest–growing segment during the forecast period. Secured loans are a widely used car financing option in Australia, where the vehicle being purchased serves as collateral for the loan. 

This structure reduces the lender's risk, often resulting in lower interest rates and more favorable loan terms compared to unsecured loans. Borrowers can typically finance a larger portion of the car's value, making secured loans an attractive option for those purchasing new or higher-value vehicles. The main advantage of secured loans is affordability, as the lower interest rates translate into reduced monthly repayments. 

Borrowers also benefit from a clear path to ownership once the loan is repaid. However, the risk of repossession exists if the borrower defaults, which can be a significant concern for those with uncertain financial stability. Also, the lenders assess the applicant's creditworthiness and income to determine eligibility, offering competitive loan packages tailored to the buyer’s financial situation. Secured loans are suitable for both private and business customers, with options available for new and used cars.

Car Finance by Distribution Channel Insights

Based on Distribution Channel, the Australia car finance market has been segmented into Banks and Financial Institutions, Online Platforms and Marketplaces, Car Dealerships, and Credit Unions. The Banks and Financial Institutions segment dominated the Australia market in 2024, while the Car Dealerships segment is projected to be the fastest–growing segment during the forecast period. Banks and financial institutions are key players in the car finance industry, offering a range of secured and unsecured loan products. 

They are known for their stability, competitive interest rates, and tailored loan packages for individuals and businesses. Banks often provide attractive incentives, such as lower rates for existing customers or bundled products like insurance and loan combinations. Banks prioritize creditworthiness and income stability during the application process, offering longer repayment terms and higher borrowing limits for eligible borrowers. 

However, their stringent eligibility criteria can limit access for those with poor credit or irregular income. Customers value the credibility and customer service of banks, making them a preferred choice for structured and long-term car financing solutions.

Car Finance by End-Users Insights

Based on End-Users, the Australia Car Finance market has been segmented into Individual Buyers and Businesses and Fleets. The Individual Buyers segment dominated the Australia market in 2024, while the Individual Buyers segment is projected to be the fastest–growing segment during the forecast period. 

Individual buyers are a major segment of the car finance industry, seeking options to purchase personal vehicles through loans or leasing. These buyers often prioritize affordability, manageable monthly repayments, and flexible terms. Financing options include secured loans, where the car serves as collateral, and unsecured loans, which provide flexibility without requiring assets as security. 

Key factors for individual buyers include competitive interest rates, quick approvals, and transparent terms. Digital platforms and online marketplaces have simplified the application process, enabling borrowers to compare options and secure financing with ease. Many lenders also offer tailored packages, such as loans for first-time buyers or options for low-income earners.

Australia Car Finance Key Market Players & Competitive Insights

Many Australia, regional, and local vendors characterize the Car Finance Market. The market is highly competitive, with all the players competing to gain market share. Intense competition, rapid advances in technology, frequent changes in government policies, and environmental regulations are key factors that confront market growth. The vendors compete based on cost, product quality, reliability, and government regulations. Vendors must provide cost-efficient, high-quality products to survive and succeed in an intensely competitive market.

The major competitors in the market are Toyota Finance Australia Limited, Commonwealth Bank, National Australia Bank Limited, Australia And New Zealand Banking Group Limited, St George Bank, Westpac, Nissan Financial Services, Hyundai Motor Company, Australia Pty Limited, BMW Group Australia, Dutton Financial Services are among others. The Australia Car Finance Market is a consolidated market due to increasing competition, acquisitions, mergers and other strategic market developments and decisions to improve operational effectiveness.

Key Companies in the Australia Car Finance Market include

• Toyota Finance Australia Limited
• Commonwealth Bank
• National Australia Bank Limited
• Australia And New Zealand Banking Group Limited
• St George Bank
• Westpac
• Nissan Financial Services
• Hyundai Motor Company
• Australia Pty Limited
• BMW Group Australia
• Dutton Financial Services

Australia Car Finance Industry Developments

July 2024: Commonwealth Bank of Australia (CommBank) has launched a new car buying service within its mobile app, a first for Australian banking. Partnering with carsales and Vyro, the service simplifies the car buying process for personal and business customers by providing tools to understand repayments, source deals, and apply for finance.

April 2023: Commonwealth Bank of Australia (CBA) is introduced eco-friendly asset finance options for green vehicles, equipment, and machinery. Commonwealth Bank of Australia's (CBA) Green Vehicle and Equipment Finance will provide discounts of up to 1% on the standard rate for new and used electric or hydrogen-powered vehicles, as well as discounts of up to 0.5% for other eligible assets such as renewable energy equipment charging and storage devices. The incentives apply to cars, trucks, vans, and buses valued at $250,000 or less.

August 2022: Nissan launched sustainable finance framework to fund electric vehicle and sustainable technologies. The Nissan Sustainable Finance Framework will enable Nissan to raise funds needed to further enhance its sustainability efforts. This initiative underlines Nissan’s commitment to promoting sustainability and strengthening efforts to realize a cleaner, safer, and more inclusive world.

July 2020: Toyota Financial Services, a wholly owned subsidiary of leading Japanese automobile maker Toyota Motor Corporation, announced the launch of its services here in Singapore. Toyota Financial Services Singapore (TFSSG) will provide financial services to Toyota and Lexus customers through Borneo Motors Singapore, the authorized distributor of Toyota and Lexusvehicles in Singapore.

Australia Car Finance Market Segmentation

Car Finance by Finance Type Outlook

• Direct Financing
  • Loans from Banks
  • Credit Unions
• Indirect Financing
  • Dealer Financing
  • Captive Finance Companies
• Leasing Options
  • Operational Leasing
  • Financial Leasing
• Personal Contract Purchase (PCP)
• Hire Purchase (HP)

Car Finance by Vehicle Type Outlook

• New Cars
• Used Cars
• Commercial Vehicles

Car Finance by Loan Type Outlook

• Secured Car Loans
• Unsecured Car Loans

Car Finance by Distribution Channel Outlook

• Banks and Financial Institutions
• Online Platforms and Marketplaces
• Car Dealerships
• Credit Unions

Car Finance by End-Users Outlook

• Individual Buyers
• Businesses and Fleets

Report Attribute/Metric	Details
Market Size 2024	USD 14.02 Billion
Market Size 2025	USD 14.33 Billion
Market Size 2035	USD 19.08 Billion
Compound Annual Growth Rate (CAGR)	3.1% (2025-2035)
Base Year	2024
Forecast Period	2025-2035
Historical Data	2019-2023
Forecast Units	Value (USD Billion)
Report Coverage	Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
Segments Covered	By Finance Type, Vehicle Type, Loan Type, Distribution Channel, End-Users
Geographies Covered	Australia
Countries Covered	Australia
Key Companies Profiled	Toyota Finance Australia Limited, Commonwealth Bank, National Australia Bank Limited, Australia And New Zealand Banking Group Limited, St George Bank, Westpac, Nissan Financial Services, Hyundai Motor Company, Australia Pty Limited, BMW Group Australia, Dutton Financial Services
Key Market Opportunities	Adoption of innovative packaging technologies for convenience, Increase in domestic and international retail brands in Australia
Key Market Dynamics	Growth of e-commerce and online retail drives packaging demand, Increasing demand for sustainable and eco-friendly packaging solutions