Car loans rise 49% as premiumisation spreads beyond metros: TransUnion CIBIL
A TransUnion CIBIL study reveals that average car loan amounts in India have surged by 49% since 2019, driven by a growing consumer preference for premium SUVs. The data highlights that this trend of premiumisation is expanding beyond major cities into semi-urban and rural markets.
Why it matters
This shift indicates rising consumer aspirations and improved credit accessibility in India, signaling a significant change in the automotive market landscape.
India’s shift towards higher-value cars is driving up vehicle loan sizes and extending repayment tenures, with premiumisation increasingly spreading beyond metropolitan centres to semi-urban and rural markets, according to a study by credit information company TransUnion CIBIL.
The study, Shifting Gears 2026 – Credit Drives Today’s Mobility, found that the average passenger vehicle loan amount rose 49% between the first half (H1) of 2019 and H1 2026 to ₹8.2 lakh. The average loan tenure increased by five months to 62 months over the same period, reflecting the growing role of financing in making higher-priced vehicles affordable.
The shift has been driven by consumer preference for SUVs and feature-rich vehicles, which has pushed up car prices. Notably, 51% of borrowers taking loans for higher-value cars (HVCs) in H1 2026 came from semi-urban and rural areas, an increase of six percentage points from 2019.
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