SCHAUMBURG – Experian Automotive last week announced that new vehicle leasing rose by 12.5 percent to achieve the highest level since it began tracking the data in 2006.
According to its State of the Automotive Finance Market report, lleasing accounted for a record 27.5 percent of all new vehicles financed, up from 24.4 percent in 1Q 2012. Additionally, findings from the report showed that the average monthly payment for a new vehicle financed in 1Q was $459, down from $462 in 1Q 2012.
"Consumers tend to shop for vehicles based within the limits of their budget, and leasing is often seen as a viable path to a lower monthly payment," said Melinda Zabritski, senior director of Automotive Credit. "Lenders have seen overall stability come back to the market since the recession, and leasing has gradually returned as a larger part of many lender strategies."
While leasing a vehicle can help consumers achieve a lower monthly payment, the report also showed a rise in loan term lengths (65 months in 1Q 2013, up from 64 months in 1Q 2012) and a decrease in interest rates (4.5 percent in Q1 2013, down from 4.6 percent in Q1 2012), which helped to keep payments low for new vehicles financed.
In Q1, the average loan amount for a new vehicle financed increased by $628, going from $26,020 in 1Q 2012 to $26,648 in 1Q 2013. The average used vehicle loan increased $461, going from $17,071 in 1Q 2012 to $17,532 in 1Q 2013.
The report also showed that consumers within all credit tiers were able to obtain financing. Most notably, loans going to consumers with credit outside of prime (nonprime, subprime and deep subprime) jumped to 45.2 percent of the overall loan market in 2013, up from 44.4 percent in 2012.
For new vehicles, the share of these loans jumped to 25.1 percent in 2013 from 23.2 percent in 2012. For used vehicles, nonprime, subprime and deep-subprime loans accounted for 57.7 percent market share in 2013, up from 56.8 percent in 2012.
In other trends:
• The average credit score for a new vehicle loan dropped to 755 in 1Q 2013, down from 760 in 1Q 2012.
• The average credit score for a used vehicle loan dropped to 657 in 2013, down from 659 in 2012.
• Finance companies had 15.5 percent market share, up 5.1 percent from 2012.
• Banks had 39.5 percent market share, down 1.7 percent from 2012.
• Captive finance companies had 17.3 percent market share, up 3.4 percent.
• Credit unions had 16.7 percent market share, up 0.4 percent.
About Experian Automotive: Experian Automotive provides information services and market intelligence that enables results-driven professionals to gain the fullest possible understanding of the market, the vehicles and the people who buy them. Its North American Vehicle Database houses data on nearly 700 million vehicles and, when combined with Experian's credit, consumer and business information, provides an integrated perspective into the automotive marketplace. For more information, visit www.experian.com/Automotive.