Affordability Shapes Auto Demand
Auto originations increased 1% in the first quarter, and electric vehicles are rebounding, according to TransUnion's latest credit report.
The average amount financed for new- and used- vehicles is up along with monthly payments.
Auto loan originations increased 1% year-over-year in the first quarter to 6.4 million despite a pullback in new-vehicle demand, according to the latest data.
TransUnion’s said in its latest Credit Industry Insights Report that new-vehicle registrations fell 6% year-over-year while the used-vehicle segment was essentially flat, reflecting ongoing affordability pressures that consumers are facing.
The consumer credit reporting agency explained that it's releasing first-quarter data now due to a lag in reporting.
The average amount financed for both new and used is rising after a period of stability, up 4% year-over-year for both segments, TransUnion reported. And average monthly payments for new and used vehicles were also up by about 3% for both markets.
While the average loan term length was flat year-over-year at 70 months for new and 67 months for used, vehicles financed for 84-plus months increased by 1% for both segments. Forty-four percent of new-vehicle payments were $750 and up, and 50% of used-vehicle payments were $500 and up.
“As market conditions evolve, lenders and dealers that can provide affordable options for consumers will be best positioned to capture demand and drive growth,” said TransUnion Senior Vice president of Automotive and Mortgage Business Satyan Merchant.
The report highlights a rebound in electric-vehicle registrations following a decline after the end of the federal EV tax credit last fall. In both the new and used segments, EV and hybrid registrations increased after the dip while gas-powered registrations declined.
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