Leasing, Borrowing for New Vehicles at 7-Year High
A record 84.5% of consumers who acquired a new vehicle in the second quarter obtained either a loan or a lease to fund the purchase, according to Experian Automotive.
That figure was at the highest level since Experian’s State of the Automotive Finance Market Report began tracking the figures in 2006, the Schaumburg, Ill.-based firm said.
The metric was up from 82.5% in the second quarter of 2012 and from 79.7% prior to the recession in the second quarter of 2008.
Findings from the report showed that of all new vehicles financed, leases accounted for an all-time high of 27.64% during the second quarter, up from 24.4% in Q2 2012.
“Obviously, this is good news for the auto industry, but it’s also good for consumers because this, combined with the reduction we have seen in delinquencies, shows that they are feeling more confident in their ability to take on more debt and pay it off in a timely manner,” said Melinda Zabritski, senior director of automotive credit for Experian Automotive.
Meanwhile, subprime loans continue to gain market share, according to Experian. Nonprime, subprime and deep-subprime new vehicle loans increased to 27.45% market share in Q2 2013, up from 25.41% in Q2 2012.
For used vehicles, nonprime, subprime and deep-subprime loans accounted for 57.31% market share in Q2 2013, up from 56.46% in Q2 2012.
In other Q2 2013 findings, Experian said the average amount financed was $26,526 for a new vehicle and $17,913 for used. The average interest rate was 4.46% on a new vehicle loan and 8.56% for used.
The average loan term was 65 months for a new vehicle and 61 months for used while the average monthly payment was $457 on a new vehicle and $351 for used.