The motor finance industry is transforming. Technological advancements combined with changing consumer preferences are reshaping how people access, finance, and interact with cars. As the traditional model of car ownership evolves, finance companies must stay attuned to emerging trends and embrace innovation to remain competitive and relevant.
In this article, we look at the trends in car ownership and usage globally, while examining innovation that promises to transform the motor industry—and, by extension, the motor finance lenders that provide the financial fuel driving this change.
Global motor trends
Vehicle usage habits and consumer demands are rapidly evolving with the rise of electric vehicles (EV), connected and automated mobility (CAM), mobility on demand (MaaS), micromobility and extensive experiential vehicle features. One significant shift that we are seeing is consumers’ attitude toward private vehicle usage and ownership. According to a recent McKinsey Mobility Consumer Pulse Survey, an overwhelming majority of consumers stated a preference toward future use of shared autonomous shuttled services (70%) and changing their mobility behaviour due to sustainability concerns (62%). 1 in 5 went as far to say that they would even consider replacing their private vehicle with ‘other’ mobility modes within the next decade. These insights demonstrate the ongoing strive for product-market fit between Original Equipment Manufacturers' (OEM) R&D efforts and consumer preferences.
The challenges are undeniable. From supply chain issues and software development challenges for legacy automakers to abating EV sales, public trust in automated models, and broader affordability concerns, the motor industry is navigating complex shifts. For the broader supply chain of the motor industry, these seismic shifts can be hard to prioritise and respond to. For finance companies, this means building flexibility into their user journeys to support a new generation of car owners who demand innovative, accessible financing options.
Innovations shaping motor finance
Subscription-based ownership
Subscription-based ownership is gaining ground as consumers seek more flexibility. Instead of locking into long-term leases or ownership, consumers (particularly those between 18-34) are seeking options that allow them to access vehicles on their own terms, often bundled with services like insurance and maintenance.
A recent Deloitte study found that 67% of younger consumers in India are interested in subscribing to vehicles rather than owning them outright. Many view this as a way to access EVs, without having to put down a significant amount of capital. This shift towards subscription models is partially driven by the rise of Mobility-as-a-Service (MaaS), which emphasises access over ownership. These models provide the flexibility to switch between vehicles, aligning with the convenience and adaptability consumers increasingly expect.
Despite the benefits, challenges remain. Consumers are concerned that subscription costs could be higher than leasing, and vehicle availability might not be guaranteed. From our vantage point, the demand for subscription-based ownership presents an opportunity for car finance providers to rethink traditional loan models and innovate with flexibility and affordability in mind.
Decentralised mobility
The sharing economy is also making its mark. Peer-to-peer (P2P) car sharing and shared ownership are becoming popular, offering consumers ways to share the financial burden of ownership while maintaining access to transportation. These models allow individuals to split costs like insurance, maintenance, and financing.
As peer-to-peer (P2P) car sharing and shared ownership continue to rise, finance providers must innovate. This means developing loan products that support shared ownership or fleet financing for P2P platforms. With the rise of AI-powered data analytics, new ways of structuring loans and managing shared costs should emerge.
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Micromobility
In line with consumers moving to sustainable mobility choices combined with convenience, micromobility is on the rise. Sales of e-bikes, e-scooters and mopeds are showing no signs of slowing – McKinsey recently estimated that the global micromobility market could reach a value of $360bn by 2030.
This growth in demand fits within the broader MaaS ecosystem - as cities and consumers embrace smaller, more affordable transportation options. For motor finance providers, this could mean developing short-term financing and rental models to suit micro-mobility fleets. Additionally, as micro-mobility becomes integrated into MaaS platforms, there may be opportunities to create bundled financial products that cover multiple modes of transportation.
Connected cars
The rise of connected cars represents an exciting development, with the market value for connected cars expected to grow from $12.4bn in 2024 to $26.4bn in 2030. Vehicles equipped with IoT sensors and connected through 5G networks generate real-time data on driving habits, vehicle health, and even location. This opens new possibilities for financial institutions, particularly in the areas of risk management and dynamic pricing.
As software-defined vehicles become the norm, automakers are increasingly looking to monetise features like software updates, in-car entertainment, and safety services. A recent Financial Times article noted that carmakers like Stellantis are targeting €20bn in annual revenue from software and subscription services. Underscoring the role that software has as a new revenue stream and a potential area for financial innovation. For instance, finance providers can offer bundled subscription plans that include ongoing software services and personalised loan terms.
This shift towards data-driven personalisation reflects growing consumer demand for tailored solutions. Europe is currently the fastest-growing region in the connected car market, with consumers increasingly seeking advanced driver assistance systems, infotainment, and communication technologies. Similarly, developed markets are embracing data-driven personalisation; 80% of consumers in India showed strong interest in real-time updates that enhance the driving experience, improve safety, and reduce maintenance costs. In contrast, there is more cautious sentiment in parts of Europe, such as Germany, where consumers remain mixed on connected vehicle features that directly affect financial outcomes—such as customised insurance plans and maintenance cost forecasts based on driving behaviour. As the availability of data grows, financial products can become more precise and personalised, whether that’s offering usage-based pricing or tailoring loan structures based on vehicle usage and maintenance data.
We see this trend as an important area for car finance providers to explore. By integrating data analytics and AI capabilities into their loan management systems, finance companies can offer more flexible, responsive financial products. Including the ability to modify and change contract terms during the financing term to reflect the individual needs and behaviours of their customers. This allows for fairer pricing and gives consumers a greater sense of control and personalisation.
Concluding thoughts
As we continue to observe the motor finance landscape, it’s clear that flexibility, personalisation, and connectivity will be key drivers of change. The rise of subscription-based ownership, combined with the increasing importance of data-driven solutions and connected vehicles, is reshaping how consumers interact with transportation—and how car finance providers need to adapt.
For motor finance providers, these trends present both challenges and opportunities. Personalised, flexible financial products will be crucial in staying competitive. From subscription models to integrated payments and micro-mobility financing, the future of motor finance is ripe with potential.
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