Credit Unions Amass Largest Share of the Automotive Finance Market in Five Years
June 02 2022 - 9:30AM
Business Wire
New Experian report shows ongoing impact of
inventory shortage on automotive finance market, as average vehicle
loan amounts and monthly payments continue to rise
Through the first three months of 2022, there were some shifts
in the automotive finance market, most notably, significant growth
for credit unions. According to Experian’s State of the Automotive
Finance Market: Q1 2022 report, credit unions amassed 22.06% of the
total automotive finance market, up from 18.55% a year prior.
The credit union growth is concurrent with a drop in market
share for captives, which declined from 29.75% to 25.38%
year-over-year. The data also showed more modest year-over-year
growth for banks (up 2%) and finance companies (up 4%).
“With low inventory and high consumer demand, we’re not seeing
nearly as many incentives on the market. This has resulted in an
opportunity for credit unions to step in and gain market share, as
they often offer the lowest interest rates,” said Melinda
Zabritski, Experian’s senior director of automotive financial
solutions. “Credit unions tend to focus on the used vehicle market
and given the ongoing inventory shortages reducing availability of
new vehicles and increasing demand for used, it makes sense to see
this kind of increase in market share.”
Used vehicle financing comprised 58.98% of all vehicle financing
in Q1 2022, with new vehicle financing making up the other 41.02%,
compared to 57.37% and 42.63%, respectively, in Q1 2021. Breaking
down new vehicle financing further, leasing continued to decrease
year-over-year, making up 21.31% of new vehicle financing in Q1
2022, compared to 28.31% this time last year.
Average vehicle loan amounts and payments continue to
rise
Additional impacts of the ongoing inventory shortage include
increases in average vehicle loan amounts and monthly payments, for
both new and used vehicles. The average new vehicle loan amount
went up nearly 12% year-over-year, increasing from $35,385 in Q1
2021 to $39,540 in Q1 2022, while the average used vehicle loan
amount rose nearly 25% year-over-year, to reach $27,945, up from
$22,378 in Q1 2021. Meanwhile, the average new vehicle monthly
payment increased $71 year-over-year, reaching $648 in Q1 2022,
while the average monthly payment for used vehicles reached $503,
up $89 year-over-year.
Despite the average loan amounts and monthly payments rising,
average interest rates and loan terms remained more level
year-over-year, and even seeing some slight decreases. The average
interest rate for a new vehicle decreased from 4.15% in Q1 2021 to
4.07% in Q1 2022, while the average interest rate for a used
vehicle dipped from 8.82% to 8.62% during the same time frame. The
average loan term for new vehicle saw a slight decrease, from 69.50
months in Q1 2021 to 69.48 months in Q1 2022. Used vehicles saw an
uptick in average term, as it reached 67.65 months in Q1 2022, up
from 65.73 month in Q1 2021.
“We’re continuing to see the inventory shortage reflected in
financing attributes, especially with used vehicle values
continuing to rise so significantly due to demand,” Zabritski
continued. “Staying close to the data will be key for lenders and
dealers to make informed decisions, and help consumers find the
right vehicle for their needs and budget in the quarters to
come.”
Additional findings for Q1 2022:
- Outstanding automotive loan balances grew to $1.37 trillion in
Q1 2022, up from $1.28 trillion in Q1 2021.
- Prime financing saw the most growth in Q1 2022, increasing from
42.92% of total financing in Q1 2021 to 45.45% in Q1 2022.
- The average credit score for a new vehicle increased two points
from Q1 2021 to Q1 2022, reaching 736, while the average used
vehicle credit score increased six points in the same time frame to
669.
- SUVs and CUVs surpassed 60% of financing in Q1 2022, up from
58.95% in Q1 2021.
- The average payment difference between a new vehicle loan and
lease was $126.
About Experian
Experian is the world’s leading global information services
company. During life’s big moments – from buying a home or a car,
to sending a child to college, to growing a business by connecting
with new customers – we empower consumers and our clients to manage
their data with confidence. We help individuals to take financial
control and access financial services, businesses to make smarter
decisions and thrive, lenders to lend more responsibly, and
organizations to prevent identity fraud and crime.
We have 20,600 people operating across 43 countries and every
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Learn more at www.experianplc.com or visit our global content
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the Group.
Experian and the Experian marks used herein are trademarks or
registered trademarks of Experian and its affiliates. Other product
and company names mentioned herein are the property of their
respective owners.
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version on businesswire.com: https://www.businesswire.com/news/home/20220602005288/en/
Jordan Takeyama Experian Public Relations 1 714
830 7561 jordan.takeyama@experian.com
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