Passenger Vehicle Loan Sizes Rise 49% to ₹8.2 Lakh: TransUnion CIBIL

India’s average passenger vehicle loan amount increased 49% to ₹8.2 lakh in the first half of 2026 (H1 2026) from the first half of 2019 (H1 2019), while the average repayment tenure extended by five months to 62 months, according to TransUnion CIBIL’s Shifting Gears 2026 – Credit Drives Today’s Mobility report.

The report, which examines personal vehicle financing between H1 2019 and H1 2026, attributes the rise in passenger vehicle loan sizes to higher vehicle prices and consumer preference for SUVs and feature-rich cars. It also highlights a shift in two-wheeler financing, with a larger proportion of borrowers entering the market with established credit histories.

Non-banking financial companies (NBFCs) accounted for 37% of passenger vehicle loans and 73% of two-wheeler loans, according to the report.

Two-Wheeler Loans See More Credit-Experienced Borrowers

First-time borrowers accounted for 39% of two-wheeler loan originations in H1 2026, down 19 percentage points from 2019. Meanwhile, borrowers with more than two years of credit history made up 43% of originations, an increase of 16 percentage points over the same period.

Outstanding two-wheeler loan balances reached ₹1.76 lakh crore in June 2026, 3.2 times the level recorded in June 2019. The active borrower base nearly doubled from 1.7 crore to 3.3 crore over the same period.

Portfolio quality also improved, with balance-level delinquency for loans overdue by more than 90 days declining to 1.4% in June 2026 from 2.7% in June 2019.

Borrowers from semi-urban and rural areas accounted for 64% of two-wheeler loan originations in H1 2026, while 43% of borrowers were aged 30 or younger. The share of two-wheeler loan consumers holding other consumption-led credit products, including personal loans, consumer durable loans and credit cards, rose to 32% from 22% in H1 2019.

The report also found that 68% of consumers who took a two-wheeler loan in the second half of 2022 originated another credit product within the following three years. The proportion increased to 84% among first-time two-wheeler borrowers who already had at least two years of credit history.

Passenger Vehicle Loan Tenures Extend to 62 Months

The average passenger vehicle loan amount rose to ₹8.2 lakh in H1 2026, up 49% from H1 2019, while the average repayment tenure increased to 62 months. The report links the increase in loan sizes to higher vehicle prices and demand for SUVs and feature-rich models.

NBFCs held the largest share of passenger vehicle loans at 37%, followed by private banks at 26%. NBFCs’ share increased by four percentage points between 2019 and 2026.

The active passenger vehicle borrower base reached 2.5 crore in June 2026, 1.7 times the June 2019 level. Delinquency on balances overdue by more than 90 days declined by 95 basis points over the period to 0.5%.

Rural Markets Gain Share in Car Financing

The report identifies different borrowing patterns across age groups. Gen Z and younger Millennials were more prominent among first-time car buyers and consumers moving from two-wheelers to cars. Core and older Millennials accounted for a greater share of repeat buyers and consumers financing higher-value vehicles.

Rural originations among borrowers moving from two-wheelers to cars grew at a compound annual growth rate (CAGR) of 15% from 2019, compared with 8% for overall auto-loan originations.

Consumers in semi-urban and rural areas accounted for 51% of borrowers taking a loan for another higher-value passenger vehicle in H1 2026, up six percentage points from 2019.

TransUnion CIBIL said these trends reflect changes in vehicle ownership patterns and credit profiles, with financing playing a role in purchases across different vehicle segments and consumer groups.