Experian Automotive: Auto Leasing Reaches Record High
Leasing accounted for a record 27.5 percent of all new vehicles financed in the first quarter, according to Experian Automotive. The firm also noted decreases in average monthly payments and a stretching of loan terms.
SCHAUMBURG, Ill. — Experian Automotive reported that new-vehicle leasing rose by 12.5 percent to its highest level since the firm began tracking the data in 2006. The transaction type also accounted for a record 27.5 percent of all new vehicles financed in the first quarter, up from 24.4 percent in the year-ago quarter.
Experian Automotive also found that the average monthly payment for a new vehicle financed in first quarter was $459, down from $462 in year-ago period.
"Consumers tend to shop for vehicles based within the limits of their budget, and leasing is often seen as a viable path to a lower monthly payment," said Melinda Zabritski, senior director of Automotive Credit. "Lenders have seen overall stability come back to the market since the recession, and leasing has gradually returned as a larger part of many lender strategies."
While leasing a vehicle can help consumers achieve a lower monthly payment, the report also showed a rise in loan terms (65 months in Q1 2013, up from 64 months in Q1 2012) and a decrease in interest rates (4.5 percent in Q1 2013, down from 4.6 percent in Q1 2012), which helped to keep payments low for new vehicles financed.
In the first quarter, the average loan amount for a new vehicle financed increased by $628, rising from $26,020 in the first quarter 2012 to $26,648 in the first quarter 2013. The average used vehicle loan increased $461 from a year ago to $17,532.
Experian Automotive also reported that consumers within all credit tiers were able to obtain financing in first quarter. Most notably, loans made to consumers with credit outside of prime (nonprime, subprime and deep subprime) jumped to 45.2 percent of the overall loan market in first quarter, up from 44.4 percent in the year-ago period.
For new vehicles, the share of loans made to below-prime car buyers jumped to 25.1 percent in first quarter from 23.2 percent in the first quarter 2012. For used vehicles, nonprime, subprime and deep-subprime loans held a 57.7 percent share of the market, up from 56.8 percent in the year-ago quarter.
The following are other trends reported by Experian Automotive:
• The average credit score for a new-vehicle loan dropped to 755 in the first quarter from 760 in the year-ago quarter.
• The average credit score for a used-vehicle loan dropped to 657 from 659 in the year-ago period.
• Finance companies held a 15.5 percent share of the market, up 5.1 percent from a year ago.
• Banks held a 39.5 percent share of the market, down 1.7 percent from a year ago.
• Captive finance companies had 17.3 percent market share, up 3.4 percent from a year ago.
• Credit unions had 16.7 percent market share, up 0.4 percent from the first quarter 2012.
• Buy-here, pay-here financing held a 10.7 percent share of the market, down 6.4 percent from a year ago.
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