India's average car loan jumps 49% to ₹8.2 lakh as SUV demand rises

According to TransUnion CIBIL, the average loan for passenger-vehicles in India increased 49% to ₹8.2 lakh between the first half of 2019 and the same period in 2026, while the typical repayment term grew by five months to 62 months. Executives say the growth reflects both rising vehicle prices and a shift from entry-level models to higher-priced SUVs. The pattern is spreading beyond metropolitan areas; borrowers from semi-urban and rural regions made up 51% of upgrades to higher-value cars in H1 2026, six percentage points higher than in 2019.

Rural customers moving from two-wheelers to cars posted a 15% compound annual growth rate, outpacing overall loan growth. Used-car financing now accounts for 24% of passenger-vehicle loan originations, representing roughly ₹2-2.5 trillion of the ₹11 trillion outstanding pool. Delinquency in the 90-179-day band fell to 0.5%, and non-bank financial companies increased their share of vehicle financing, holding 37% of passenger-vehicle and 73% of two-wheeler loans. No increase in stress was observed in longer-term delinquency categories.