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Automotive Loan Market Showed Continued Stability in Q4 2019

Published: March 11, 2020 by Melinda Zabritski

Automotive parking lot

If there is one word to describe the automotive finance market in Q4 2019, it’s stable. By nearly every measure, the automotive finance market continued to move along at a good pace. Here are a few examples:

Loan balances showed steady growth

Automotive loan balances continued to grow. In Q4 2019, total loan balances reached 1.22 trillion, up from 1.17 trillion year-over-year—a healthy 4.3 percent growth. That said, it was a slower growth rate than in previous years. Q4 2018 grew 4.4 percent, while Q4 2017 saw 5.3 percent growth, but overall, growth remains consistent.

Delinquencies remained flat

Delinquencies also remained relatively flat. Thirty-day delinquencies were down slightly from 2.32 percent in Q4 2018 to 2.31 percent in Q4 2019. All lenders saw slight decreases, except for finance companies, which saw an uptick, from 4.06 percent to 4.25 percent year-over-year.

Sixty-day delinquencies saw a slight increase overall, from 0.78 percent to 0.79 percent year-over-year. The breakout of lender types followed a similar pattern as 30-day delinquencies, with all lenders except finance companies seeing slight decreases. Finance companies increased from 1.65 percent in Q4 2018 percent to 1.74 percent in Q4 2019.

Average credit scores rose for loans and leases

Average credit scores for new vehicle loans and leases have shown steady growth over the past four years. From Q4 2015 to Q4 2019, the average credit score for a new vehicle loan grew from 712 to 719. For new vehicle leases, the average score jumped from 715 to 725 over the same period.

For used vehicle loans, the average credit score increased from 649 to 661 over the past four years. Even independent dealers, who typically cater to customers with low credit, the average score jumped from 609 to 630 in the past four years.

Affordability remains top of mind

These trends are especially positive in a market where affordability is top of mind. As average new vehicle loan amounts surpass $32,000, and average used vehicle loan amounts surpass $20,000, there has been speculation that consumers wouldn’t be able to handle the payments attached to those loans. But stability in delinquency rates and continued growth in the market counter that argument.

Additionally, with the continued increases in average credit scores, it’s clear that consumers have made maintaining their financial health a priority. As new tools that leverage alternative data like Experian Boost continue to enter the market, dealers and lenders should stay up to date so they can help consumers continue to keep their financial health intact and still drive away in their ideal vehicle.

At the end of the day, as average loan amounts continue to increase, there are naturally more dollars at risk. This is why it is so important to pay close attention to trends such as delinquency rates to best mitigate risk. But overall, the data points toward a steady and positive future for the auto finance market.

To view the entire Q4 2019 State of the Automotive Finance Market report, or to watch the webinar, visit https://www.experian.com/automotive/automotive-webinars.html

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Published: March 1, 2025 by Jon Mostajo, test user

The automotive industry is constantly changing. Shifting consumer demands and preferences, as well as dynamic economic factors, make the need for data-driven insights more important than ever. As we head into the National Automobile Dealers Association (NADA) Show this week, we wanted to explore some of the trends in the used vehicle market in our Special Report: State of the Automotive Finance Market Report. Packed with valuable insights and the latest trends, we’ll take a deep dive into the multi-faceted used vehicle market and better understand how consumers are financing used vehicles. 9+ model years grow Although late-model vehicles tend to represent much of the used vehicle finance market, we were surprised by the gradual growth of 9+ model year (MY) vehicles. In 2019, 9+MY vehicles accounted for 26.6% of the used vehicle sales. Since then, we’ve seen year-over-year growth, culminating with 9+MY vehicles making up a little more than 30% of used vehicle sales in 2024. Perhaps more interesting though, is who is financing these vehicles. Five years ago, prime and super prime borrowers represented 42.5% of 9+MY vehicles, however, in 2024, those consumers accounted for nearly 54% of 9+MY originations. Among the more popular 9+MY segments, CUVs and SUVs comprised 36.9% of sales in 2024, up from 35.2% in 2023, while cars went from 44.3% to 42.9% year-over-year and pickup trucks decreased from 15.9% to 15.6%. 2024 highlights by used vehicle age group To get a better sense of the overall used market, the segments were broken down into three age groups—9+MY, 4-8MY, and current +3MY—and to no surprise, the finance attributes vary widely. While we’ve seen the return of new vehicle inventory drive used vehicle values lower, it could be a sign that consumers are continuing to seek out affordable options that fit their lifestyle. In fact, the average loan amount for a 9+MY vehicle was $19,376 in 2024, compared to $24,198 for a vehicle between 4-8 years old and $32,381 for +3MY vehicle. Plus, more than 55% of 9+MY vehicles have monthly payments under $400. That’s not an insignificant number for people shopping with the monthly payment in mind. In 2024, the average monthly payment for a used vehicle that falls under current+3MY was $608. Meanwhile, 4-8MY vehicles came in at an average monthly payment of $498, and 9+MY vehicles had a $431 monthly payment. Taking a deeper dive into average loan amounts based on specific vehicle types—as of 2024, current +3MY cars came in at $28,721, followed by CUVs/SUVs ($31,589) and pickup trucks ($40,618). As for 4-8MY vehicles, cars came in with a loan amount of $22,013, CUVs/SUVs were at $23,133, and pickup trucks at $31,114. Used 9+MY cars had a loan amount of $19,506, CUVs/SUVs came in at $17,350, and pickup trucks at $22,369. With interest rates remaining top of mind for most consumers as we’ve seen them increase in recent years, understanding the growth from 2019-2024 can give a holistic picture of how the market has shifted over time. For instance, the average interest rate for a used current+3MY vehicle was 8.0% in 2019 and grew to 10.2% in 2024, the average rate for a 4-8MY vehicle went from 10.3% to 12.9%, and the average rate for a 9+MY vehicle increased from 11.4% to 13.8% in the same time frame. Looking ahead to the used vehicle market It’s important for automotive professionals to understand and leverage the data of the used market as it can provide valuable insights into trending consumer behavior and pricing patterns. While we don’t exactly know where the market will stand in a few years—adapting strategies based on historical data and anticipating shifts can help professionals better prepare for both challenges and opportunities in the future. As used vehicles remain a staple piece of the automotive industry, making informed decisions and optimizing inventory management will ensure agility as the market continues to shift. For more information, visit us at the Experian booth (#627) during the NADA Show in New Orleans from January 23-26.

Published: January 21, 2025 by Melinda Zabritski

Electric vehicle (EV) registrations are re-gaining momentum as a wave of more affordable models hit the market, pushing more consumers than ever to make the transition. According to Experian’s State of the Automotive Finance Market Report: Q3 2024, EVs made up 10.1% of new vehicle financing this quarter, increasing more than 30% from last year. Furthermore, 45% of EV consumers leased their vehicle in Q3 2024—resulting in EVs accounting for 17.3% of all new vehicle leasing. Of the top five transacted EV models this quarter, Tesla accounted for three—with the Tesla Model Y leading at 31.8%, followed by the Tesla Model 3 (14.3%) and Tesla Cybertruck (4.9%). Rounding out the top five were the Ford Mustang Mach-E (3.9%) and Hyundai IONIQ 5 (3.7%). Interestingly, data in the third quarter of 2024 found that consumers’ financing decisions vary based on the EV model they’re looking at. For example, 76.5% of consumers purchased the Tesla Model Y with a loan and 13.1% opted for a lease; on the other hand, only 8.5% of consumers bought the Hyundai IONIQ 5 with a loan and 78.7% chose to lease. Despite the rising interest in leasing as more incentives and rebate programs roll out, some consumers still prefer to purchase their EV with a loan. Understanding financing patterns based on different models is key for professionals as they cater to the diverse preferences and determine the long-term viability of certain EVs and their potential for leasing renewals. Snapshot of the overall vehicle finance market As the finance market continues to stabilize, it’s notable that the average interest rate for a new vehicle fell year-over-year, going from 7.1% to 6.6%, respectively. However, average new vehicle loan amounts increased $736 from last year, reaching $41,068 in Q3 2024, and average monthly payments went from $732 to $737 in the same time frame. On the used side, average interest rates saw a slight uptick to 11.7% in Q3 2024, from 11.6% last year. Meanwhile, the average loan amount dropped from $1,195 over the last year to $26,091 this quarter and the average monthly payment declined from $538 to $520 year-over-year. With the overall market shifting and EVs re-sparking interest, automotive professionals should leverage how consumers are purchasing their vehicles based on average payments and the fuel type as more incentives are being offered. Monitoring these insights can unlock opportunities for tailored financing solutions that meet the needs of consumers as preferences continue to evolve. To learn more about automotive finance trends, view the full State of the Automotive Finance Market: Q3 2024 presentation on demand.

Published: December 5, 2024 by Melinda Zabritski

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