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
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.
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.