The average passenger-vehicle loan in India reached ₹8.2 lakh in the first half of 2026, up 49% from the first half of 2019, while the average repayment tenure grew by five months to 62 months, according to TransUnion CIBIL’s Shifting Gears 2026 report released on 13 Oct 2026. The finding matters to buyers because more of a car purchase is being financed, and the repayment period is stretching alongside vehicle prices and demand for higher-value models.
This is a market-level average, not a live quote or a prediction of what every borrower will pay. A buyer’s monthly instalment and total repayment still depend on the financed amount, down payment, interest rate, fees, credit profile and tenure offered by the lender.
Key takeaways
- Average car-loan size: CIBIL recorded ₹8.2 lakh in H1 2026, 49% higher than in H1 2019.
- Repayment period: The average tenure increased by five months to 62 months.
- Where financing is spreading: Semi-urban and rural borrowers accounted for 51% of higher-value car-loan borrowers in H1 2026.
- What the figures do not mean: They do not set a standard car price, EMI or interest rate for an individual borrower.
What the CIBIL report found
The report studied personal vehicle financing between H1 2019 and H1 2026. CIBIL linked the rise in passenger-vehicle loan sizes to higher vehicle prices and stronger preference for SUVs and feature-rich cars. Its data also shows that formal credit is reaching beyond the largest cities, making vehicle financing more important in purchase decisions for first-time buyers, upgrades and households moving from two-wheelers to cars.
The active passenger-vehicle borrower base reached 2.5 crore as of June 2026, which CIBIL described as 1.7 times the June 2019 level. At the same time, balance-level delinquency for passenger-vehicle loans overdue by more than 90 days declined by 95 basis points to 0.5% over the period. That combination points to a larger and more established borrowing market, but it does not remove the need to examine the cost of an individual loan.
Higher-value cars are driving larger borrowing
Non-banking financial companies accounted for 37% of passenger-vehicle loans in the report, ahead of private banks at 26%. CIBIL said the NBFC share increased by four percentage points between 2019 and 2026. These figures describe the distribution of lending, not a recommendation about which type of lender a buyer should choose.
The report also found that 51% of borrowers taking another higher-value car loan in H1 2026 were from semi-urban and rural geographies, up six percentage points from 2019. The shift is relevant for buyers outside metros because a longer loan term can make a higher-priced vehicle fit a monthly budget, while also keeping the repayment obligation in place for more time.
Two-wheeler finance is also becoming more established
The change is not limited to cars. Borrowers with more than two years of credit history made up 43% of two-wheeler loan originations in H1 2026, compared with 27% in 2019. First-time borrowers accounted for 39% of two-wheeler originations in H1 2026, according to CIBIL.
Two-wheeler loan balances reached ₹1.76 lakh crore as of June 2026, while the active borrower base rose to 3.3 crore from 1.7 crore in June 2019. Semi-urban and rural borrowers accounted for 64% of two-wheeler originations in H1 2026. For riders and gig-economy workers, the data shows how vehicle credit is becoming part of a longer household or work-mobility journey rather than only a first borrowing product.
What a longer tenure changes
A longer tenure spreads repayment across more months, but the lower monthly outgo that may result should not be confused with a lower total cost. The final interest burden depends on the lender’s rate, the outstanding principal, the repayment schedule, processing or documentation charges, insurance and any prepayment conditions. CIBIL’s general auto-loan guidance says lenders assess the borrower’s credit history, income and existing repayments; it also notes that auto-loan tenures can vary by lender and product.
That is why the ₹8.2 lakh average should be read as a financing trend rather than a target loan size. A buyer comparing a new vehicle with a used one can use the new versus used car-loan cost guide to keep the financed amount, tenure and total repayment separate in the comparison.
Checklist for comparing a vehicle loan
- Separate the amounts: Note the on-road price, down payment, loan principal and any amount added for accessories or other charges.
- Ask for the total repayment: An EMI alone does not show how much will be paid across the full tenure. Keep processing, documentation, registration and insurance costs visible.
- Compare like with like: Review offers at the same principal and tenure before comparing the monthly instalment. A longer term can change the total interest even when the EMI looks easier to manage.
- Check profile-linked terms: Confirm the quoted rate, eligibility conditions, repayment schedule, late-payment charges and prepayment rules in the lender’s documents. Actual offers vary by borrower profile and lender.
- Budget ownership beyond the EMI: Fuel, maintenance, insurance and taxes continue after delivery. The FuelPrice fuel-cost calculator can help estimate the running-cost part separately from financing.
What to watch next
The CIBIL report is a snapshot of financing activity through H1 2026; it does not announce a new loan rate or require lenders to extend tenures. Future vehicle prices, credit conditions and borrower demand will determine whether the larger-ticket, longer-tenure pattern continues.
FuelPrice’s earlier RBI repo-rate and car-loan reset coverage explains the separate policy-rate context. The CIBIL findings should not be treated as evidence that every borrower’s rate or EMI has changed by the same amount.
FAQ
Is ₹8.2 lakh the price of the average car?
No. It is the average passenger-vehicle loan amount recorded by TransUnion CIBIL for H1 2026. The vehicle’s on-road price can be higher or lower depending on the model, down payment and other costs.
Does a 62-month tenure apply to every car loan?
No. It is the average reported by CIBIL for the period studied. Lenders may offer different tenures, and the final option depends on the vehicle, borrower profile, loan amount and lender policy.
Does a longer tenure always reduce the cost?
No. It can spread repayment over more months, but the total interest and fees depend on the rate, principal, repayment schedule and charges. The complete offer documents are needed for a borrower-specific calculation.
Sources
- TransUnion CIBIL, “Rising Car Prices and Aspirational Consumer Choices Drive Higher Auto Loan Sizes” (13 Oct 2026)
- Autocar Professional, “Passenger Vehicle Loan Sizes Rise 49% to ₹8.2 Lakh: TransUnion CIBIL” (13 Oct 2026)
- TransUnion CIBIL, “Auto Loans” (accessed 13 Oct 2026)
This article is for general information only and is not financial, insurance or legal advice.
