Australia Automotive Financing Market: Market Size & Forecast 2026

Australia's automotive financing market covers retail loans, leases, and balloon finance for passenger cars, light commercials, trucks, and buses, plus a sizeable used-vehicle financing sub-market. The market is worth roughly USD 7.48 billion in 2025 and is projected to grow at a 6.89% CAGR through the next decade. Penetration of finance at the point of sale is high, reflecting consumer preference to spread the cost of increasingly expensive vehicles.

• •Market size of about USD 7.48 billion in 2025, with a forecast CAGR of 6.89%
• •High finance penetration at Australian dealerships, particularly for new vehicles
• •Used-car financing is a large and fast-growing sub-segment within the broader market

Sustained demand for personal mobility, inflated vehicle prices following pandemic-era supply disruptions, and tight new-car inventory have pushed more buyers toward financed purchases. Low unemployment, real wage growth, and a structurally undersupplied housing market are also sustaining household appetite for vehicle credit. At the same time, fleet operators face higher capital costs for trucks and vans, making finance and operating lease structures essential to fleet renewal.

• •Rising new and used vehicle prices lift average loan sizes and finance volumes
• •Restrictive lending rules have eased modestly, supporting credit availability for prime borrowers
• •Fleet renewal cycles for commercial vehicles are driving structured finance demand

The market splits between passenger vehicles (the dominant category), commercial vehicles, two-wheelers, and a rapidly expanding used-car finance segment. New-vehicle financing typically carries longer terms and lower margins, while used-car finance offers higher yields and shorter contracts. Geographically, New South Wales and Victoria account for the largest share of financed originations, reflecting population and dealer concentration, with Queensland and Western Australia showing above-average growth tied to resources activity.

• •Passenger cars remain the largest segment, followed by commercial vehicles and used cars
• •NSW and Victoria dominate originations; Queensland and WA are the fastest-growing states
• •Used-car financing is gaining share as affordability pressures steer buyers away from new vehicles

What are the recent trends and outlook?

Digital loan origination, soft credit-data underwriting, and embedded finance at online car marketplaces are reshaping distribution. Electric vehicle uptake is introducing new asset classes and residual-value risk, prompting lenders to refine pricing and term structures. Outlook to 2030 remains constructive: continued price growth, gradual EV penetration, and structural undersupply of vehicles point to sustained expansion in financing volumes, with margins migrating toward digital and used-car channels.

• •EV financing is emerging as a distinct product with tailored residual-value assumptions
• •Online and embedded finance channels are reducing the role of traditional branch-based credit decisions
• •Market is on track to roughly double in size by the early 2030s under base-case assumptions