SCHAUMBURG, Ill. — Used vehicles are commanding a larger share of the U.S. automotive finance market, according to Experian’s Q3 2019 State of the Automotive Finance Market report. Used financing increased 2.4% year-over-year, reaching 55.15% in Q3 2019, compared to 53.86% in Q3 2018.
The trend appears to be driven by a number of factors, analysts said, including a higher percentage of prime customers financing used vehicles and an increased availability of late-model vehicles.
While used vehicle loans saw growth in Q3 2019, the most significant shift was in the superprime segment, increasing 3.3% to reach 13.42% during the quarter. As a whole, prime and superprime consumers make up 51.24% of used loans — the highest percentage since Q3 2009.
Even when financing used vehicles, consumers continue to lean toward longer payment terms, analysts noted, with used terms clocking in at 64.89 months and average new vehicle loan terms reaching 69.28 months.
The average loan amount for a new vehicle increased 3.8% to reach $32,480. The average used loan amount increased 2.3% to $20,466.
Average vehicle loan amounts continued to increase across the board. The average loan amount for a new vehicle increased 3.8% to reach $32,480. The average used loan amount increased 2.3% to $20,466. Average monthly payments continue to remain high in Q3. The average monthly payment for a new vehicle was $550, while the average monthly payment for a used vehicle reached $393.
“Consumers appear to be realizing that financing a used vehicle can be an optimal choice — particularly as they look to improve their financial health. With so many late model vehicles, used vehicles can offer similar features to new vehicles but at a lower cost,” said Melinda Zabritski, Experian’s senior director of automotive financial solutions. “Understanding these trends can help lenders and dealers ensure they have the right options available for consumers.”