<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=905697862838810&amp;ev=PageView&amp;noscript=1">

Subscribe

    Lending | 2 min read

    Auto Finance Market Stats and Trends: Q4 2019

    It’s that time again—time to breakdown the latest State of the Automotive Finance Market1 report by Experian. Overall, the auto lending market was strong as 2019 came to a close. Total open loan balances reached $1.22 billion at the end of Q4, with the majority of lenders portfolios remaining deep subprime and prime.

    Delinquency

    Stable delinquency trends bode well for consumers and lenders alike. Credit Unions saw their 30-day delinquency rates remain at 1.28% year-over-year, while banks and finance companies saw a 0.06% and 0.19% decrease, respectively.

    Used lending remains strong

    Consumers continue to gravitate toward used vehicles. In fact, used prime lending surpassed 50%, a Q4 high since 2009. Credit Unions, specifically, held 26.74% of the used financing market share. Consistent with previous years, deep subprime and subprime borrowers chose used auto loans in Q4, 91.11%, and 81.29%, respectively.

    Monthly payments continue to rise

    As I mentioned in my last post, average loan amounts and monthly payments continue to rise. Average new lease payments reached $461 per month with a 36.67-month lease term in Q4. Total loan amounts vary by risk tier; however, average loan amounts were $32,797 and $20,554 for new and used loans, respectively.

    Loan terms reach record highs

    Longer loan terms continue to dominate the market. Loan terms on new loans reached 69.26 months, while used car loans sat right at 64.96 months. Year-over-year, this was a 0.53% change.

    In summary, delinquency trends remain stable, although consumer confidence is wavering with fears about the Coronavirus (COVID-19) and the gyrations in the stock market. Look for captive finance companies to launch a new round of incentives in an effort to create demand and move inventory. It should be an eventful year, so, buckle up because it may get rocky.

    New call-to-action

    1. https://www.experian.com/content/dam/marketing/na/automotive/quarterly-webinars/credit-trends/2019-q4-state-of-the-automotive-finance-market.pdf

    Related Categories

    Lending

    Michael Dippo

    As Senior Vice President of Automotive Products, Michael works closely with our Collateral Protection Insurance (CPI) carriers to manage existing CPI programs and develop new coverages for our clients. He is responsible for underwriting, corrective action, skip tracing, and asset recovery as they pertain to our CPI and blanket VSI products.

    You may also like:

    Lending

    In a Digital Age, Smaller Financial Institutions Must Offer… Lollipops?

    Recent bank failures have cast an unfair light on smaller financial institutions. The shuttering of Silicon Valley Bank,...

    Lending

    Leveraging LPI for Success in the Mortgage Industry

    Like most markets these days, the mortgage industry is facing considerable economic headwinds as high inflation and the ...

    Lending

    Inflation’s Impact on the Housing Market

    Everything happening in our economy today hinges on inflation. If inflation continues to fall quickly, robustly, and smo...

    Let Us Know What You Thought about this Post.

    Put your Comment Below.

    Blog-CTA-Icon_Webinar-Video

    FREE Webinar

    SWBC 2024 Economic Forecast

    Join our experts as they discuss the state of the economy in 2024 and beyond. 

    On Demand | Duration: 75 minutes

    Watch Now