MUMBAI: Auto financiers are pushing for innovation in lending, with a shift towards embedded finance and partnerships instead of generic EMI products, even as global markets adopt integrated digital credit at the point of sale.Speaking at the Federation of Automobile Dealers Association (FADA) 5th Finance and Insurance Summit 2026 in Mumbai Rajan Pental, executive director at Yes Bank, said that there was a need to make the process of ownership seamless. “While the industry has been providing auto loans as an instalment product, we have not yet succeded in developing an embedded product”. Pental said that today the customer walks in with full knowledge of the car and its features, and the multiplicity of lenders delays the transaction. In developed markets, lenders and OEM captives routinely offer fully digital, embedded credit at the dealer or through online configurators, with instant decisions, e-sign, and funding tied to the vehicle order. Embedded finance in Europe and the US is maturing into platform-led models where banks integrate into OEM, dealer, and marketplace journeys rather than selling standalone loans.In contrast, India’s auto finance market remains dominated by traditional loans, with leasing accounting for around 1.5% and subscription around 0.1% of the market.Pental urged the industry to go beyond ex-showroom pricing and offer schemes designed for every pin code. He said that banks are major users of technology, and there could be integration to offer products to pre-approved borrowers.C S Vigneshwar, president FADA, said that finance was the life blood of the auto industry, and that finance and insurance business were the “load bearing walls” which were keeping auto dealerships viable.Raul Rebello, MD & CEO of Mahindra Finance, said that the industry had achieved scale, and the gap between rural and urban sales was disappearing. “Today there are many financiers at auto dealerships. It is possible to do a lot of innovations in financing through co-lending.” Vigneshwar said that dealer partners have highlighted key areas for improvement across finance and insurance. He said that in wholesale finance, dealers expect more transparent, demand-led funding and quicker transmission of interest rate reductions. In retail finance, he said there is a need for more robust used-vehicle funding solutions and smoother reconciliation processes.He said that in insurance, faster claims settlement and stronger protection of dealer-led customer relationships remain critical priorities.