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Experian: Used Vehicles Accounted for 68 Percent of Loans in 1Q

June 09, 2009

SCHAUMBURG, Ill., — A struggling economy and stricter

lending criteria have pushed more consumers toward used vehicle loans, according to Experian Automotive. In the first quarter of 2009, used-vehicle loans accounted for 68.13 percent of all auto loans, up from 64.3 percent of all automotive loans in the first quarter of 2008, while new-vehicle loans fell by nearly 4 percent in the same period.

“Banks, credit unions and

captive finance companies appear to have tightened their lending criteria as

they look to mitigate risk,” said Melinda Zabritski, director of automotive

credit for Experian Automotive. “Loans are still available, but lenders are

changing terms. This is pushing some consumers out of the new vehicle market

and into the used vehicle market. Some finance companies that specialize in

subprime loans have seen their share increase as traditional lenders move away

from riskier loans.”

Independent used vehicle

dealers — those dealers not affiliated with a specific manufacturer — were the

biggest winners in the first quarter, seeing their share of used vehicle loans

rise from 31.58 percent in the first quarter of 2008 to 34.97 percent in the

first quarter of 2009. Independent dealers typically serve customers with lower

credit scores and are gaining share as traditional lenders tighten their loan


Other findings include the


· Loans

30 days past due were up 11.3 percent year over year in the first quarter of

2009, while loans 60 days past due were up 19.5 percent. Currently, 2.48

percent of all automotive loans are 30 days past due, compared with 2.22

percent in the first quarter of 2008. Automotive loans 60 days past due rose to

0.82 percent from 0.69 percent.

· Consumer

credit also has worsened in the past year, with the percentage of consumers who

are considered prime decreasing by 2.6 percent. Conversely, the percentage of

highest-risk consumers grew by 6.03 percent.

· Minnesota, Connecticut, Wisconsin, Iowa and Massachusetts boasted the highest average credit score

for new vehicle loans in the first quarter, while New

Hampshire, Connecticut, Minnesota, North Dakota

and Wisconsin had the highest average credit score for used vehicle loans.

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