New-Vehicle Financing, Leasing Reach New Highs
Experian Automotive reports that 84.5 percent of consumers used a loan or a lease to purchase a new vehicle in the second quarter, with leasing accounting for 27.64 percent of all new vehicles financed during the quarter.
Schaumburg, Ill., Sept. 03, 2013 —Experian Automotive today announced that a record 84.5 percent of consumers who acquired a new vehicle in the second quarter obtained either a loan or a lease to fund the purchase.
According to the company’s latest “State of the Automotive Finance Market” report, new-vehicle financing was at its highest level since tracking began in 2006. This metric is up from 82.5 percent in the second quarter 2012 and from 79.7 percent prior to the recession in the second quarter 2008.
“Loans have become more accessible in recent years, and we’ve seen a steady growth in the percentage of consumers financing their vehicles,” said Melinda Zabritski, senior director of automotive credit for Experian Automotive. “Obviously, this is good news for the auto industry, but it’s also good for consumers because this, combined with the reduction we have seen in delinquencies, shows that they are feeling more confident in their ability to take on more debt and pay it off in a timely manner.”
Findings from the report showed that of all new vehicles financed, leases accounted for an all-time high of 27.64 percent during the second quarter, up from 24.4 percent in the second quarter 2012. Additionally, the report highlighted the differences in financing attributes, such as average monthly payment, credit score and financing term. For example, the average monthly lease payment was $408, compared with $457 on a new vehicle loan.
Lease (new vehicle) | Loan (new vehicle) | |
Monthly payment | $408 | $457 |
Credit score | 760 | 749 |
Term | 35 months | 65 months |
Nonprime, subprime and deep-subprime new-vehicle loans increased to 27.45 percent market share in the second quarter 2013, up from 25.41 percent in year-ago period. For used vehicles, nonprime, subprime and deep-subprime loans accounted for 57.31 percent market share in the second quarter, up from 56.46 percent in year-ago period.
Additionally, the average amount financed was $26,526 for a new vehicle and $17,913 for used, while the average instead on a new-vehicle loan was 4.46 percent. For used, the average interest rate was 8.56 percent.
Experian Automotive also showed that the average loan term for a new vehicle was 65 months in the second quarter, 61 months for used. The average month payment was $457 for new and $351 for used.
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