Vehicle financing in the country is valued at approximately USD 46.33 billion in 2026 and is projected to reach USD 63.82 billion by 2031, growing at a compound annual rate of 6.62 percent, with NBFCs continuing to dominate over banks in this category due to sharper product focus and deeper presence in non-metro cities where used vehicle finance penetration is expected to climb from 48 percent to 55 percent by fiscal 2025. Shriram Finance, formed through the November 2022 merger of Shriram Transport Finance and Shriram City Union Finance, has emerged as the country’s largest retail NBFC with assets under management exceeding Rs 2.6 lakh crore spanning vehicle, MSME, gold, and tractor loans, while Mahindra Finance and Cholamandalam Investment and Finance continue to compete closely for leadership in rural and semi-urban vehicle lending respectively. Electric vehicle financing has emerged as a genuine new growth frontier, with Shriram Finance partnering with Montra Electric on customised EV loan products and securing a USD 150 million ADB facility targeting MSME and EV expansion. Let us have a look at the top 10 vehicle finance NBFC companies in India for 2026.
1. Shriram Finance Limited
Shriram Finance, formed in November 2022 through the merger of Shriram Transport Finance Company and Shriram City Union Finance, is India’s largest retail NBFC with assets under management exceeding Rs 2.6 lakh crore across vehicle, MSME, gold, and tractor loans, built on more than four decades of experience since the Shriram Group’s 1979 founding in Chennai. The company specialises in used commercial vehicle financing, holding an estimated 18 to 20 percent market share within its focused categories including trucks, buses, and cargo vans, while its deep rural and semi-rural penetration serves small transport operators that traditional banks have historically underserved.
Shriram Finance serves self-employed truck drivers, small transport operators, and MSMEs across India’s rural and semi-rural markets with unmatched specialisation in used commercial vehicle financing, and its position as the largest retail NBFC in the country by assets under management confirms its status as the single most dominant vehicle finance company in India today.
2. Mahindra & Mahindra Financial Services Limited
Mahindra Finance, a subsidiary of the Mahindra Group established in 1991 initially to finance Mahindra utility vehicles, reported assets under management of Rs 1.15 lakh crore in Q3 FY2025, reflecting 19 percent year-on-year growth with an impressive 95 percent collection efficiency. The company finances passenger cars, SUVs, tractors, commercial vehicles, and increasingly electric vehicles, with its ‘Used Car Digi Loans’ platform, launched in partnership with Car&Bike and Rupyy in March 2023, marking a significant digital pivot for a company traditionally known for its deep rural and semi-urban branch network.
Mahindra Finance serves rural households, farmers, and semi-urban vehicle buyers with deep geographic penetration built over more than three decades, and its combination of strong asset growth, industry-leading collection efficiency, and genuine digital transformation confirms its position among the top three NBFC vehicle lenders in the country by scale and operational quality.
3. Cholamandalam Investment and Finance Company Limited
Cholamandalam Investment and Finance, part of the Murugappa Group and established in 1978, operates through 575 branches using a distinctive twin-hub model that pairs centralised risk analytics with district-level loan origination, financing new and used cars, commercial vehicles across light and heavy categories, and home equity products. The company’s vehicle finance book is widely regarded as one of the most consistently high-quality portfolios among Indian NBFCs, with an increasingly aggressive push specifically into the used commercial vehicle segment.
Cholamandalam Investment and Finance serves vehicle buyers and commercial fleet operators with structured, analytically disciplined underwriting that has produced one of the industry’s most consistently high-quality loan books, and its twin-hub operational model combining centralised risk management with local origination confirms its position as one of the most methodologically sophisticated vehicle finance NBFCs in the country.
4. Tata Capital Limited
Tata Capital has substantially expanded its vehicle finance capability through the acquisition of Tata Motors’ captive vehicle finance unit, extending its product range from scooters to heavy trucks and drawing customers across every income background due to the trusted Tata Group brand and flexible lending terms. The company’s diversified retail, corporate, infrastructure, and wealth management platform gives its vehicle finance business access to broader institutional risk management and funding infrastructure than most standalone vehicle finance specialists.
Tata Capital serves vehicle buyers across every category from two-wheelers to heavy commercial trucks with the trusted Tata Group brand and flexible financing terms, and its strategic acquisition of Tata Motors’ captive finance operations confirms its position as one of the most rapidly expanding and vertically integrated vehicle finance NBFCs in the country.
5. Sundaram Finance Limited
Sundaram Finance, one of the most veteran and conservatively managed names in Indian vehicle financing, has built decades of accumulated expertise in commercial vehicle and equipment leasing with a particularly strong presence across South India. The company’s reputation for disciplined risk management and strong governance, reflected in consistently reported healthy return ratios, has made it a preferred lender among businesses that specifically value institutional stability and prudent underwriting over aggressive growth.
Sundaram Finance serves commercial vehicle buyers and businesses seeking a conservatively managed, institutionally stable financing partner, and its decades-long reputation for disciplined lending and strong governance confirms its position as one of the most trusted legacy vehicle finance companies for customers who prioritise stability over the fastest possible loan approval.
6. Kotak Mahindra Prime Limited (KMPL)
Kotak Mahindra Prime has built its reputation specifically around quick and easy vehicle loan processing, known for exceptionally simple documentation requirements and fast loan disbursal that appeals strongly to customers seeking a straightforward, hassle-free borrowing experience. The company’s integration with the broader Kotak Mahindra Bank ecosystem, including embedded EV financing partnerships for brands like Tesla India, gives it a distinctive technology and premium-segment positioning relative to more traditional vehicle finance NBFCs.
Kotak Mahindra Prime serves customers prioritising fast, low-documentation vehicle loan processing alongside access to premium and electric vehicle financing partnerships, and its embedded EV financing capability for brands including Tesla India confirms its position as one of the more technologically forward-looking vehicle finance companies in the country.
7. HDFC Bank (Auto Loans Division)
HDFC Bank commands a dominant share of the bank-led segment of India’s auto loan market, contributing significantly to the 51.72 percent overall bank share of auto lending, offering the lowest cost of funds among vehicle lenders which translates directly into competitive interest rates for customers. The bank’s massive branch and ATM network combined with digital lending journeys tightly integrated into the HDFC Bank mobile app give it unmatched customer servicing convenience, though its stricter credit norms mean thin-file or informal-income borrowers may not qualify as easily as with NBFC alternatives.
HDFC Bank serves creditworthy, well-documented vehicle buyers seeking the lowest possible cost of funds combined with extensive digital banking convenience, and its dominant contribution to the overall bank-led share of India’s auto loan market confirms its position as the clear leader among traditional banking institutions competing in vehicle finance.
8. TVS Credit Services Limited
TVS Credit Services, part of the TVS Group, operates as a specialist lender focused specifically on two-wheeler and three-wheeler financing across India, working closely with TVS Motor Company dealerships while also expanding into used vehicles and personal loans. The company has built one of the widest dealer-integrated distribution networks for two-wheeler loans through more than 13,000 channel partners, consistently running promotional EMI schemes that have made it a preferred financing partner at the point of two-wheeler purchase.
TVS Credit Services serves two-wheeler and three-wheeler buyers with dealer-integrated financing available directly at the point of purchase across an extensive channel partner network, and its specialised focus on this specific vehicle category makes it the clearest category leader for two-wheeler financing among India’s vehicle finance NBFCs.
9. L&T Finance Limited
L&T Finance has successfully executed a strategic pivot toward a retail-first lending model, categorised in the RBI’s Upper Layer NBFC classification with a strong market position in rural finance, micro-loans, and housing finance supported by advanced digital infrastructure. The company’s vehicle finance operations benefit from the parent Larsen & Toubro group’s deep engineering and construction industry relationships, giving it distinctive credibility for commercial and construction vehicle financing specifically.
L&T Finance serves rural borrowers and commercial vehicle buyers with a genuinely retail-first, digitally advanced lending model backed by the parent group’s engineering and construction industry heritage, and its RBI Upper Layer classification alongside its strong rural finance market position confirms its status as one of the most systemically significant vehicle finance NBFCs in the country.
10. Hero FinCorp Limited
Hero FinCorp, backed by the Hero Group of the country’s largest two-wheeler manufacturer, provides financing directly integrated with Hero MotoCorp’s extensive dealership network, giving the company a distinctive point-of-sale distribution advantage for two-wheeler financing specifically. The company’s close relationship with its parent group’s manufacturing and dealer ecosystem allows for streamlined, fast-approval financing precisely at the moment customers are making a vehicle purchase decision.
Hero FinCorp serves two-wheeler buyers at the point of purchase through deep integration with Hero MotoCorp’s dealership network, and its manufacturer-affiliated distribution advantage makes it one of the most conveniently positioned financing partners for customers purchasing India’s most widely sold two-wheeler brand.
Frequently Asked Questions (FAQs)
Q: Which is the largest vehicle finance NBFC in India?
A: Shriram Finance is India’s largest retail NBFC with assets under management exceeding Rs 2.6 lakh crore spanning vehicle, MSME, gold, and tractor loans, holding an estimated 18 to 20 percent share in its focused used commercial vehicle financing categories, followed by Mahindra Finance and Cholamandalam Investment and Finance as leading competitors.
Q: Should I choose a bank or an NBFC for vehicle financing?
A: Banks such as HDFC Bank typically offer the lowest cost of funds and most competitive interest rates but apply stricter credit norms that may exclude thin-file or informal-income borrowers, while NBFCs such as Shriram Finance, Mahindra Finance, and Cholamandalam typically offer more flexible credit assessment criteria, faster processing, and better service specifically in Tier II and Tier III markets.
Q: How big is India’s vehicle financing market?
A: The India auto loan market is valued at approximately USD 46.33 billion in 2026 and is projected to grow to USD 63.82 billion by 2031 at a compound annual growth rate of 6.62 percent, with used vehicle finance penetration in non-metro cities expected to grow from 48 percent to 55 percent by fiscal 2025.
Q: Which companies specialise in two-wheeler and three-wheeler financing?
A: TVS Credit Services and Hero FinCorp are the two most prominent specialists in two-wheeler and three-wheeler financing, each leveraging deep dealership integration with their respective parent manufacturers, TVS Motor Company and Hero MotoCorp, to offer point-of-sale financing directly at the moment of vehicle purchase.
Q: How is electric vehicle financing evolving among vehicle finance NBFCs?
A: Shriram Finance partnered with Montra Electric in January 2025 for customised EV loan products and secured a USD 150 million ADB facility targeting MSME and EV expansion, while Kotak Mahindra Prime has built embedded EV financing partnerships for brands including Tesla India, reflecting the broader industry’s rapid build-out of dedicated financing products for the country’s growing electric vehicle market.
