Tag: used-vehicles

With the National Automobile Dealers Association (NADA) Show set to kickoff later this week, it seemed fitting to explore how the shifting dynamics of the used vehicle market might impact dealers and buyers over the coming year. Shedding light on some of the registration and finance trends, as well as purchasing behaviors, can help dealers and manufacturers stay ahead of the curve. And just like that, the Special Report: Automotive Consumer Trends Report was born. As I was sifting through the data, one of the trends that stood out to me was the neck-and-neck race between Millennials and Gen X for supremacy in the used vehicle market. Five years ago, in 2019, Millennials were responsible for 33.3% of used retail registrations, followed by Gen X (29.5%) and Baby Boomers (26.8%). Since then, Baby Boomers have gradually fallen off, and Gen X continues to close the already minuscule gap. Through October 2024, Millennials accounted for 31.6%, while Gen X accounted for 30.4%. But trends can turn on a dime if the last year offers any indication. Over the last rolling 12 months (October 2023-October 2024), Gen X (31.4%) accounted for the majority of used vehicle registrations compared to Millennials (30.9%). Of course, the data is still close, and what 2025 holds is anyone’s guess, but understanding even the smallest changes in market share and consumer purchasing behaviors can help dealers and manufacturers adapt and navigate the road ahead. Although there are similarities between Millennials and Gen X, there are drastic differences, including motivations and preferences. Dealers and manufacturers should engage them on a generational level. What are they buying? Some of the data might not come as a surprise but it’s a good reminder that consumers are in different phases of life, meaning priorities change. Over the last rolling 12 months, Millennials over-indexed on used vans, accounting for more than one-third of registrations. Meanwhile, Gen X over-indexed on used trucks, making up nearly one-third of registrations, and Gen Z over-indexed on cars (accounting for 17.1% of used car registrations compared to 14.6% of overall used vehicle registrations). This isn’t surprising. Many Millennials have young families and may need extra space and functionality, while Gen Xers might prefer the versatility of the pickup truck—the ability to use it for work and personal use. On the other hand, Gen Zers are still early in their careers and gravitate towards the affordability and efficiency of smaller cars. Interestingly, although used electric vehicles only make up a small portion of used retail registrations (less than 1%), Millennials made up nearly 40% over the last rolling 12 months, followed by Gen X (32.2%) and Baby Boomers (15.8%). The market at a bird’s eye view Pulling back a bit on the used vehicle landscape, over the last rolling 12 months, CUVs/SUVs (38.9%) and cars (36.6%) accounted for the majority of used retail registrations. And nearly nine-in-ten used registrations were non-luxury vehicles. What’s more, ICE vehicles made up 88.5% of used retail registrations over the same period, while alternative-fuel vehicles (not including BEVs) made up 10.7% and electric vehicles made up 0.8%. At the finance level, we’re seeing the market shift ever so slightly. Since the beginning of the pandemic, one of the constant narratives in the industry has been the rising cost of owning a vehicle, both new and used. And while the average loan amount for a used non-luxury vehicle has gone up over the past five years, we’re seeing a gradual decline since 2022. In 2019, the average loan amount was $22,636 and spiked $29,983 in 2022. In 2024, the average loan amount reached $28,895. Much of the decline in average loan amounts can be attributed to the resurgence of new vehicle inventory, which has resulted in lower used values. With new leasing climbing over the past several quarters, we may see more late-model used inventory hit the market in the next few years, which will most certainly impact used financing. The used market moving forward Relying on historical data and trends can help dealers and manufacturers prepare and navigate the road ahead. Used vehicles will always fit the need for shoppers looking for their next vehicle; understanding some market trends will help ensure dealers and manufacturers can be at the forefront of helping those shoppers. For more information on the Special Report: Automotive Consumer Trends Report, visit Experian booth #627 at the NADA Show in New Orleans, January 23-26.

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.

According to Experian’s Automotive Market Trends Report: Q1 2024, hybrids accounted for 11.8% of new vehicle registrations, an increase from 8.8% last year.

From consumers seeking versatility and additional cargo space to more models becoming available—a discernible trend the automotive industry has seen in recent years is the shift towards utility vehicles such as SUVs and crossover utility vehicles (CUVs). In fact, Experian’s Automotive Market Trends Report: Q4 2023 found that utility vehicles were a significant driver in new vehicle registrations, coming in at 57.3%, up from 56.2% through Q4 2022. Meanwhile, pickup trucks declined from 18.5% last year to 17.2% this quarter and sedans went from 17.1% to 16.5% in the same time frame. Optimizing vehicle maintenance post-manufacturer warranty Despite utility vehicles making up the majority of new vehicle registrations through Q4 2023, passenger vehicles (85.1%) and light trucks (82.7%) had the most vehicles that were outside of the general manufacturer warranty this quarter—mostly due to a high volume of registrations in previous years. By comparison, 67.1% of all utility vehicles were outside the general manufacturer warranty. Understanding the current status of these vehicles enables aftermarket professionals to tailor their service recommendations accordingly. Furthermore, it will be important to monitor this trend over the next few years as the vehicles that are currently under manufacturer warranty will likely need maintenance after it expires. !function(e,n,i,s){var d="InfogramEmbeds";var o=e.getElementsByTagName(n)[0];if(window[d]&&window[d].initialized)window[d].process&&window[d].process();else if(!e.getElementById(i)){var r=e.createElement(n);r.async=1,r.id=i,r.src=s,o.parentNode.insertBefore(r,o)}}(document,"script","infogram-async","https://e.infogram.com/js/dist/embed-loader-min.js"); Vehicle registrations and aftermarket sweet spot When looking at overall registration trends, new vehicles increased 12.5% from last year—reaching 15.3 million through Q4 2023 and used vehicles declined 1.5% year-over-year to 38.2 million this quarter. While monitoring vehicle registration trends helps aftermarket professionals properly assist consumers now and in the future, identifying and understanding the aftermarket “sweet spot” allows them to stay ahead of the curve and adapt to changes as the market continues to evolve. Vehicles in the sweet spot are generally between six- to 12-model-years-old and have aged out of general OEM manufacturer warranties for any repairs. Through Q4 2023, 35.5% of all vehicles in operation landed in the sweet spot, marking a 3.6% year-over-year increase. Though, the aftermarket sweet spot volume is expected to hit its peak in the next few months at nearly 116 million vehicles—considering the record high was 104 million through 2011 and the sweet spot volume reached 102.4 million through Q4 2023. As aftermarket professionals look for ways to reach the right audience, leveraging registration data and the types of vehicles entering the market enables them to adjust their marketing strategies accordingly and plan their services effectively. To learn more about vehicle market trends, view the full Automotive Market Trends Report: Q4 2023 presentation on demand.

In a recent episode of the Used Car Dealer Podcast, host Zach Klempf, sat down with Jim Maguire, Experian’s senior director of product marketing for automotive, to discuss the prevalence of fraud in the automotive industry. During their conversation, Jim highlighted the findings in Experian’s 2023 Identity and Fraud Report, giving listeners a deeper understanding into the evolving dynamics of fraud, with data and insights on the current landscape and what actionable strategies dealers can take to prevent it. The episode is now available across all major podcast platforms, click the link below to watch: YouTube For more information on the Used Car Dealer Podcast, visit - https://www.sellyautomotive.com/podcast Facebook - @SellyAutomotive Twitter - @SellyAutomotive LinkedIn - @SellyAutomotive

Experian’s State of the Automotive Finance Market Report: Q4 2022 found that the year-over-year (YOY) average new loan amount increased 4.04%, a smaller growth rate compared to 12.46% YOY in Q4 2021

To help the industry better understand the widespread growth, ahead of the show we compiled an Auto Finance Year-in-Review report to break down all things EV—from financing trends to vehicle segments and more.

According to Experian’s Automotive Market Trends Report: Q3 2022, new vehicle registrations were down 16.4%, going from 12.2 million through Q3 2021 to 10.2 million this quarter. Used vehicles experienced a 12.6% decline, coming in at 29.8 million through Q3 2022, from 34.1 million the previous year.

Experian’s State of the Automotive Finance Market Report: Q3 2022 found that consumers with credit scores between 300 and 660—also considered as the nonprime segments—are continuing to opt for used vehicles rather than new.

According to Experian’s State of the Automotive Finance Market Report: Q2 2022, the average new vehicle interest loan rate for consumers with a credit score between 501 and 600, also referred to as subprime, was 9.75%—compared to prime consumers with a credit score between 661 and 780, who had an average new vehicle interest loan rate of 4.03% this quarter.

Consumers are shifting to used vehicles over new, with a higher percentage of consumers financing used. The move comes as the industry continues to grapple with inventory shortages, driving vehicle values higher.

Trends can vary based on location. In the Q1 2021 State of the Automotive Finance Market report, we took a look at market share nationally and regionally.

AutoCheck Buyback Protection is a policy that will compensate a consumer by buying back their vehicle under certain circumstances...

Experian's Q4 2020 State of the Automotive Finance Market report gives insight into the current state of the leasing market.

According to Experian’s Q3 2020 State of the Automotive Finance Market report, 26.20% of all new vehicles are leased compared to 30.27% last year.