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Putting Consumers in the Driver’s Seat of Their Credit Scores

Published: January 25, 2019 by Jeff Softley

Young couple looking at tablet in car dealership

Purchasing a new car is often seen as one of life’s milestone moments. But, not having a high enough credit score can prevent people from attaining affordable loan terms, or require more upfront cash to purchase a vehicle. This can create a challenge for car shoppers— but also for the dealers who try to help prospective buyers drive off the lot.

Previously, all dealers could do to educate consumers was share traditional methods for increasing a credit score, such as making on-time payments, and lowering credit utilization. Now, thanks to Experian Boost, dealers have a new tool that they can share with consumers.

Empowering Prospective Car Buyers

 Experian Boost gives consumers greater control over their credit profiles by allowing them to add non-traditional credit information to their Experian credit files, including utility (water, electric, gas) and telecommunications (cable, internet, phone, satellite and wireless) payment information.

With the consumer’s permission, the platform connects to their online bank accounts to identify and access these payments. After the consumer verifies the data and confirms they’d like to add it to their credit report, an updated FICO® Score is delivered in real time. Experian Boost aims to help all credit active consumers improve their credit and break down the barriers that prevent them from achieving their financial goals, such as purchasing a vehicle.

A New Resource for Car Dealers         

 Dealers and lenders can rest assured this isn’t a tool that was created to support credit approvals for those that don’t deserve it. All consumers with Experian Credit Profiles can use Experian Boost, and while two-thirds of consumers are likely to see an improvement in their credit score, the product will have the biggest impact for consumers with incomplete credit profiles – or “thin file” consumers.

‘Thin file’ means they have less than five trade lines currently in their credit files. That doesn’t mean they can’t pay, or don’t want to pay their debts, it means lenders don’t have enough information to assess the risk of lending to these individuals – so they miss out on the best offers and terms. Utilizing tools like Experian Boost can help give these consumers the potential to gain access to the credit they deserve.

 Experian Boost is an innovation that not only creates new opportunities for consumers, but a new resource for car dealers as well. By proactively educating their customers about the power of Experian Boost, dealers empower them to take control and proactively add additional information, real-time, to their Experian credit report file.

Having these additional details added to one’s Experian credit profile give lenders an expanded view, enabling them to make more informed lending decisions. When applying for a vehicle loan, an expanded credit file can better demonstrate the strength of a consumer’s credit.

With the right resources, including Experian Boost, dealers can play a partner role for consumers looking to achieve their financial goals. Experian Boost was created to provide consumers with more financial opportunities and control over their credit. For car dealers, it’s a solution to potentially help those consumers who never thought they’d be able to buy the car they’ve always wanted.

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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

Quick Answer: New research on generational buying habits can help the auto industry better understand target audiences and improve marketing.  The automotive industry is undergoing a rapid transformation, driven by technological advancements, changing consumer preferences, and a diverse marketplace. To navigate this complex landscape, understanding your target audience is key. This is where generational insights are indispensable.     Why Generations Matter  Each generation brings unique values, preferences, and buying behaviors to the table. Ignoring these differences can lead to ineffective marketing campaigns and missed opportunities.  Different Needs and Priorities: Baby Boomers, Gen X, Millennials, and Gen Z have distinct needs and priorities when it comes to vehicles. For example, Baby Boomers may purchase more luxury vehicles, while Gen Z purchases a higher percentage of non-luxury vehicles.  Communication Styles: Each generation responds differently to marketing messages. Traditional advertising might resonate with Baby Boomers, while social media and influencer marketing could be more effective for younger generations.  Purchasing Behavior: The way people research and purchase cars has evolved significantly across generations. Understanding these differences can help you optimize your sales process.  Leveraging Generational Insights  To effectively leverage generational insights, consider the following:  Conduct In-Depth Research: Gain a deep understanding of each generation's values, preferences, and buying habits. Use data analytics, surveys, and focus groups to gather insights.  Create Targeted Messaging: Develop tailored messaging that resonates with each generation. Highlight the features and benefits that matter most to them.  Choose the Right Channels: Select the most effective marketing channels for each generation. For example, television advertising might be less effective for Gen Z compared to social media.  Personalize the Customer Experience: Offer personalized experiences that cater to the specific needs and preferences of each generation.  Embrace Technology: Utilize technology to reach and engage different generations. For example, virtual showrooms or augmented reality experiences can appeal to younger consumers.  Special Report: Generational Insights  We've conducted in-depth research on generational buying habits for new and used vehicles. These insights can revolutionize your automotive marketing and sales strategies. Gain a competitive edge with our Automotive Consumer Trends Special Report: Generation Insights. Discover how to tailor your approach for maximum impact. Conclusion  In today's competitive automotive market, understanding your target audience is essential for success. By incorporating generational insights into your marketing strategy, you can create more effective campaigns, build stronger customer relationships, and drive sales growth. Remember, a one-size-fits-all approach is unlikely to work. Embrace the diversity of your audience and tailor your message accordingly.  Experian Automotive is here to help you with your marketing needs.  If you’d like to learn more about our solutions and how we can support you, contact us below.

Published: August 26, 2024 by Kirsten Von Busch

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