Major auto lenders had a 14 percent increase in origination growth in 1999, down from a 20 percent increase the previous year, according to findings of the 2000 Consumer Bankers Association Auto Finance Study.

The findings also suggest that smaller lenders did relatively better than the biggest ones, according to Dave Kretz, manager, KPMG Consulting, and author of the CBA study.

Approval ratios improved, with more than 60 percent of applications approved and more than 40 percent of them booked.

The average loan size for new vehicles increased only slightly, to $19,573, compared to more dramatic increases from $17,905 in 1997 and $17,241 in 1996. The average used car loan showed a similar pattern and averaged $14,279 last year, Kretz said.

Loan maturities more than five years continue to increase, and now comprise one out of four new car loans and 14 percent of used car loans.

For the first time, all large survey respondents reported using tiered rates for new and used cars, and tiered pricing grew significantly at smaller and medium-sized lenders as well. The average number of pricing tiers used is five, according to Kretz.

In a measurement of credit bureau scores on loan originations, there was a slight drop in the highest tiers and the lowest tiers, with typical scores moving toward the middle ranges. Loan delinquencies dropped slightly, to below 2 percent on new vehicles.

Leasing also grew, with a 12 percent increase in the number of leases booked, although there was greater diversity in growth rates at different companies. Bookings to applications ratios improved in line with loans, Kretz reported.

While almost all lessors have end of term discussions with lessees, just over half make contacts six months or more prior to lease-end to discuss disposition. Kretz noted that just 29 percent of respondents match their end of term activities with perceived residual risk.

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