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The average passenger vehicle loan amount rose 49 per cent to ₹8.2 lakh in the first half of 2026 from the corresponding period in 2019, while the average repayment tenure rose by five months to 62 months, suggesting rising car prices and consumer aspirations, a TransUnion CIBIL report said on Tuesday.

According to the report, 'Shifting Gears 2026- Credit Drives Today's Mobility', premiumisation, driven by demand for SUVs and feature-rich cars, was extending beyond metropolitan cities, with 51 per cent of borrowers taking loans for higher-value cars in the January-June period coming from semi-urban and rural areas.

NBFCs continued to lead vehicle financing, accounting for 73 per cent of two-wheeler loans and 37 per cent of passenger vehicle loans.

The active passenger vehicle borrower base reached 2.5 crore as of June 2026, 1.7 times the June 2019 level. Delinquency in passenger vehicle loans, measured by balances overdue for more than 90 days, declined to 0.5 per cent from the year-ago-period benchmark of 1.45 per cent in June 2019.

"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," TransUnion CIBIL MD and CEO Bhavesh Jain said.

The report also found that two-wheeler financing was increasingly attracting borrowers with established credit histories. Their share rose to 43 per cent in the first half of 2026 from 27 per cent in the corresponding period of 2019, while first-time borrowers' share fell to 39 per cent.

Outstanding two-wheeler loan balances increased 3.2 times to ₹1.76 lakh crore in June 2026, while the active borrower base rose to 3.3 crore from 1.7 crore in June 2019. The 90-day-plus delinquency rate declined to 1.4 per cent from 2.7 per cent.

Borrowers from semi-urban and rural areas accounted for 64 per cent of two-wheeler loans in the first half of 2026, while 43 per cent of borrowers were aged 30 years or younger.

Rural originations among consumers upgrading from two-wheelers to cars grew at a compound annual growth rate of 15 per cent since 2019, compared with 8 per cent for overall auto-loan originations.

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