The Automotive Finance Market Continued to Move Forward at a Healthy Pace in Q1 2021, With Total Open Loan Balances Reaching ...
27 Mayo 2021 - 7:00AM
Business Wire
Experian’s latest report also highlights
geographic trends in automotive finance
The automotive finance market saw strong performance during the
first quarter, according to Experian’s Q1 2021 State of the
Automotive Finance Market report. Total open automotive loan
balances increased from $1.168 trillion in Q1 2020 to $1.288
trillion in Q1 2021. Much of the growth was driven by captive
lenders, who saw significant growth year-over-year, from 23.82% of
the automotive finance market share to 28.02% from Q1 2020 to Q1
2021.
Prime and super prime consumers continued to make up the largest
portion of financing in Q1 2021, comprising 64.88% of total
financing, compared to 60.56% a year ago. In addition, the findings
show that prime consumers are opting to finance new vehicles in
larger quantities. In Q1 2020, 66.61% of prime and 50.15% of super
prime consumers opted for used vehicles, which decreased to 62.76%
and 45.41% in Q1 2021, respectively.
“The industry continues to be resilient, despite the
continuation of some of the challenges caused by COVID-19, such as
used inventory and global chip shortages,” said Melinda Zabritski,
Experian’s senior director of automotive financial solutions.
“While captives have seen notable growth, there should be continued
opportunity for other players to increase market share. Focusing on
data to better understand these trends will help lenders and
dealers navigate the dynamic marketplace.”
Highlighting geographic auto finance trends While
captives increased their market share on a national level, looking
at the data on a regional level shows some differences. Captive
lenders hold the majority share of financing in the West (31.23%)
and Northeast (44.34%), but banks took the top spot for the Midwest
(33.26%) and South (30.83%) regions.
In addition, there are regional differences in the types of
vehicles being financed. For instance, the Ford F150 is the top
financed new vehicle in the Midwest and South regions, compared to
the Toyota RAV4 in the West region and the Honda CR-V in the
Mideast. These differences also impact average MSRP in the regions,
which is slightly higher in the West region, at $38,121, and lowest
in the Northeast region at $36,989.
Average loan attributes remain consistent Average loan
amounts and monthly payments saw smaller increases year-over-year
compared to recent quarters. The average new vehicle loan amount
was $35,392 in Q1 2021, up from $33,833 in Q1 2020, while the
average monthly payment increased $7 year-over-year to $577. Used
vehicle financing saw similar changes, with the average loan amount
increasing from $20,689 in Q1 2020 to $22,375 in Q1 2021, while the
average monthly payment increased from $394 in Q1 2020 to $413 in
Q1 2021. These larger loan amounts and average monthly payments can
likely be attributed to consumer preferences for larger vehicles,
with more than 56% of new vehicles financed falling into the SUV
segment.
“Affordability will likely continue to remain a prominent topic
in the industry as we move through 2021,” Zabritski continued. “As
the industry continues to navigate tight inventory and other
potential disruptions, ensuring that lenders and dealers are able
to meet consumers’ needs will require staying close to the data to
make the most strategic decisions.”
Additional findings for Q1 2021:
- Leasing was down in Q1 2021: 26.66% of new vehicles were
leased, compared to 30.68% in Q1 2020, while 8.56% of used vehicles
were leased, down from 9.83% in Q1 2020.
- The average difference between a loan and lease payment was
$108 in Q1 2021.
- Average credit scores increased year-over-year, with the
average new vehicle credit score increasing from 728 in Q1 2020 to
734 in Q1 2021, and increasing from 655 to 663 for used vehicles,
in the same time frame.
- The average term for a new vehicle loan saw a slight uptick
from 69.03 months in Q1 2020 to 69.50 months in Q1 2021, while on
the used side the increase was more notable, from 64.54 months to
65.74 months year-over-year.
To learn more, watch the entire Q1 2021 State of the Automotive Finance Market report
webinar.
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Jordan Takeyama Experian Public Relations 1 714
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