CV loans see stress, used-car finance races ahead: CRIF report

Commercial vehicle loans recorded the highest early-stage delinquency among vehicle finance products, with portfolio at risk (PAR) 31-90 at 4.1 per cent in June 2026. Auto loans remained the best-performing asset class across both PAR 31-90 and PAR 91-180, according to a CRIF High Mark report.

The vehicle finance portfolio grew at a 20.1 per cent compound annual growth rate (CAGR) between June 2021 and June 2026, broadly in line with the 19 per cent CAGR in overall retail credit. Used car loans grew the fastest at 26.2 per cent, followed by commercial vehicle loans at 20.1 per cent and two-wheeler loans at 19.7 per cent. Auto loans grew 17.6 per cent.

“The vehicle financing sector is healthy and keeping pace with an expanding retail market, driven heavily by commercial vehicles and the formalization of the used car market, while auto loans lean toward premiumisation to recapture momentum,” CRIF High Mark said.

The risk environment was stabilising, with later-stage delinquencies improving across vehicle products. Between June 2024 and June 2026, PAR 91-180 for auto loans fell to 0.6 per cent from 0.8 per cent, while that for two-wheeler loans declined to 1.2 per cent from 1.6 per cent. Used car loans stood at 1 per cent and commercial vehicle loans at 0.9 per cent in June 2026.

However, the report flagged a rise in borrowers with multiple active vehicle loans, particularly among commercial vehicle borrowers. The share with two or more active loans increased to 19.9 per cent in June 2026 from 15.7 per cent in June 2021.

The report also pointed to premiumisation in auto loans, with the share of loans above ~15 lakh rising to 29.8 per cent in Q1FY27 from 27.6 per cent in Q1FY25. Premium and electric two-wheelers priced above ~1 lakh accounted for 43 per cent of originations in Q1FY27, up from 38 per cent in Q1FY25.

In commercial vehicle loans, the ~5-10 lakh ticket-size segment increased its share of originations to 30.5 per cent in Q1FY27 from 22.4 per cent in Q1FY25, reflecting a shift towards light and medium commercial vehicle financing.

For auto loans, borrowers aged 31-40 and 41-50 emerged as strong potential segments. Borrowers aged 30 years or below had PAR 91-180 of 1 per cent in June 2026, compared with 0.6 per cent or lower for other age groups. The report said the 31-40 age group had demonstrated stronger risk recovery and growth, although some improvement could be attributed to portfolio recalibration.

Vehicle finance accounted for 11.4 per cent of the retail portfolio outstanding in June 2026, unchanged from June 2021. Commercial vehicle loans increased their share of retail credit to 4.2 per cent from 4 per cent, while used car loans rose to 0.7 per cent from 0.5 per cent. Auto loans declined to 5.5 per cent from 5.9 per cent, while two-wheeler loans edged up to 1.1 per cent from 1 per cent.

Used car financing was the fastest-growing segment, with portfolio outstanding rising at a 26.2 per cent CAGR between June 2021 and June 2026.