Overall, the automotive finance market has remained resilient, despite the pandemic. Staying close to the data will help lenders ensure they have the right options available to fit consumers’ needs and budgets.
Incorporating vehicle history reports into the lending decisions can help uncover hidden issues with the vehicle and adjust loan terms accordingly.
As we look at the market in Q3, there were a number of notable statistics that can help lenders identify trends and inform strategy.
Despite smaller percentage of financed vehicles, outstanding loan balances grew 2.8% year-over-year to more than $1.2 trillion.
The average loan amount for a new vehicle jumps $4,000; however, the average monthly payment remains steady.
The more insight lenders have into the current market, the better positioned they will be to present car shoppers with financing options that meet consumers’ unique circumstances.
April data sheds light into how the industry was impacted during the early stages of COVID-19.
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.
Experian’s Q2 auto finance report consumers continue to uncover ways to manage monthly payments. For a record percentage of prime borrowers, that meant passing on a $32,000-plus new-vehicle loan in favor of a pre-owned unit.
TransUnion analysts report more consumers in the prime and superprime credit tiers are choosing to buy used as off-lease units continue to flood the market, offering a budget-friendly alternative to increasingly expensive new cars.
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