As the proportion of pre-owned vehicles rises, effectively managing asset quality becomes crucial for boosting earnings, even as margins are likely to improve.

• Vehicle segment share in overall NBFC (including HFCs^ and excluding NBFC-Infrastructure Finance Companies, or NBFC-IFCs) assets under management (AUM) has steadily moderated to 23% in September 2025 from 26% in March 2021; vehicle finance AUM growth has been lower than other retail loans. Slower growth is attributed to the modest revival in overall vehicle sales volumes after the pandemic along with increasing competition from banks in the key vehicle asset segments.
• NBFCs are increasing their focus on pre-owned/used assets as financial penetration in this category is lower and the used asset market is quite sizeable. The share of pre-owned assets in the overall vehicle loan book of NBFCs is expected to grow steadily to over 41% by March 2027 over 34% in March 2020.