AFIA highlights vital role of non-bank lenders in Australian motor finance

Motor finance non-bank lenders (MNBLs) are playing a critical role in helping Australians access vehicles for work, family life and business operations, according to a new report from the Australian Finance Industry Association (AFIA).

The report found that MNBLs provided $24.4 billion of motor vehicle finance to more than 507,000 consumer and commercial customers in 2025, while the value of active loans reached $53 billion by the end of the year.

With Australia maintaining one of the highest rates of vehicle ownership globally and many consumers relying on cars for employment, education and access to essential services, AFIA said a competitive and thriving non-bank lending sector is vital to maintaining access to credit and supporting economic participation.

According to the report, MNBLs finance almost one in ten passenger vehicles across Australia through more than 1.4 million active accounts. The sector accounts for around 60% of lending to consumers in the motor vehicle finance market and continues to play an important role in supporting borrowers who may be underserved by traditional lenders.

“Non-bank and specialist lenders in the motor vehicle finance market are helping Australians get access to an asset that is not a luxury, but a necessity – indeed, more than nine in ten households own at least one motor vehicle,” she said.

“For many Australians, a car is either their second largest purchase after the family home – or their first major one entirely. With cost-of-living pressures and the strain on household and business finances showing no sign of abating, promoting access to these loans has never been more important.”

Tate said specialist lenders are also supporting customer groups that can face greater challenges accessing finance through traditional channels.

“What’s more, these specialist lenders are serving customers that are often underserved, such as first-time buyers, self-employed Australians, and small business owners that don’t pay themselves a salary because they invest their revenue in business assets,” she said.

The report highlights the importance of dealership-based lending, with around 70% of motor vehicle loans originating through dealerships and approximately 70% of loans secured against vehicles. AFIA said the findings underline the continued importance of point-of-sale finance for Australian consumers, with three out of four Australians believing the availability of finance at the point of sale is important.

The industry body also pointed to the sector’s role in supporting Australia’s transition to lower-emission transport. Non-bank lenders are increasingly providing finance solutions for hybrid and electric vehicles, helping consumers and businesses access newer vehicle technologies as demand continues to grow.

Tate said the report demonstrates that the sector remains both responsible and highly regulated, while continuing to provide support to customers experiencing financial hardship.

“The industry data also shows this is a well-regulated and responsible sector, with active support for customers experiencing hardship,” she said.

“This report reinforces that a competitive, accessible and responsible motor vehicle finance market is fundamental to helping Australians access motor vehicles – that’s where MNBLs are playing their part.”