Reliance Commercial Finance, a part of Reliance Capital, is entering the ₹20,000-crore used-car finance market. With this, the company, which has been largely focussing on SME lending across sectors, would be shifting its focus to the consumer finance sector.

The company’s entry into the motor finance segment comes just months after it appointed Devang Mody as its CEO. Prior to this, Mody was with Bajaj Finance as President of Consumer Business.

Talking to BusinessLine , Mody said that with focus on the motor finance sector, the company plans to be amongst the top three players in this space and is targeting ₹7,500 crore in the next three years as the segment is growing at 20 per cent year-on-year on the back of more consumers looking to buy used-cars.

“Last fiscal was the first when volumes in the used-car industry — at 3.3 million units — was higher than new car sales. We see this as a growing trend and believe this segment of used or pre-owned car financing would get bigger in the coming years,” said Mody, adding that the dynamics of pre-owned cars in also undergoing a change.

“Increasing participation by car makers is bringing in more transparency and confidence, thus breaking the taboo of owning pre-owned cars. Car ownership periods have also come down, and being a cost-conscious market, it is a matter of time before more consumers start looking at buying used-cars,” he added.

According to industry estimates, the used-car financing segment has been growing at 20 per cent offering a potential for pre-owned cars to overtake new vehicle sales in the next three years. Currently, the used-car finance penetration in India is at 15-18 per cent, at ₹20,000 crore, which is sharply lower than new car financing at 80-85 per cent. The company has also launched an online platform for dealers to give on-the-spot approval of finance to customers.

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