Q3 Auto Finance: Used Accounts for 55% of Loans
Experian analysts say buyers of pre-owned vehicles accounted for 55.15% of all U.S. auto loan originations in the third quarter, a 2.4% year-over-year increase.
The average term for a U.S. auto loan extended to 69.28 months for new vehicles and 64.89 for pre-owned units.
Photo by tookapic via Pixabay
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.
Read: Spike in Wholesale Volume Hurts Pre-Owned Values
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.”
Originally posted on F&I and Showroom
More Industry
RV Group Expands Carolina Footprint
Blue Compass RV Columbia Northeast is the 13th RV dealership owned by Blue Compass in the Carolinas.
Read More →
Agent Acumen
An Agent Summit panel of people who’ve been supporting auto dealers for years gave both timely and timeless advice for those starting out or mulling the prospect.
Read More →
Missed Maintenance Creates Opportunity
As families get back on the road and into daily school routines, service drives have an opportunity to capture customers who are behind on recommended vehicle maintenance.
Read More →
Mitsubishi Unveils U.S. Plan
The automaker announced a strategy that includes an expanded lineup and dealership presence, along with more ‘rugged’ and electric models.
Read More →
Selling to Grow
The question of whether you should sell your agency and if so, when, is up to you. But it’s a question worth asking to ensure you keep the business on the right path for yourself, employees and clients.
Read More →
Recalled Vehicles Hit 5-Year High
Though the number of events has fallen so far this year, impacted units are up significantly. Meanwhile, regulators consider consumer notification changes.
Read More →
Auto Group Acquires Top-Performing Rooftop
Car Pros sold its Kia Huntington Beach location to Sutherlin Automotive Group, marking the buyer’s third location in Southern California.
Read More →
China as Pacesetter
Automotive leaders huddled on where North America stands in the global picture and how it can strengthen its position against the Asian juggernaut’s surging industry.
Read More →
BMW Concept Car Makes Fuel to Burn
The prototype developed in concert with a South Carolina university engineering team generates more solar energy than it uses in a typical daily commute.
Read More →
South Carolina Auto Group Downsizes
Florida-based group Holler-Classic has acquired four rooftops, its first in South Carolina, from Dick Smith Automotive Group.
Read More →