Experian’s latest report has detailed significant changes in the automotive finance market during the first quarter of 2024. The return of new vehicle inventory and appealing incentives from manufacturers has reignited consumer interest in new vehicle purchases. This resurgence has brought about a notable impact on lender market share, with captives holding the largest new vehicle market share since 2010.
According to Experian’s State of the Automotive Finance Market Report: Q1 2024, captives’ market share for new vehicle financing surged to 61.75%, a level not seen since 2010. Meanwhile, banks decreased from 23.36% to 20.65% year-over-year, and credit unions experienced a decline from 17.02% to 9.69% over the same period.
Melinda Zabritski, Head of Automotive Financial Insights at Experian, commented on the impact of the return of new vehicle inventory, noting that this has not only drawn consumers away from the used vehicle market, but has also led to a resurgence in leasing. The report disclosed an increase in new vehicle leasing to 24.12% in Q1 2024, up from 19.33% in Q1 2023. Furthermore, the average monthly payment for a new lease decreased by $7 compared to the previous year, reaching $595 in Q1 2024.
The report also revealed that SUVs dominated the top leased vehicles in Q1 2024, with the Honda CR-V and Tesla Model Y leading the pack. The average loan amount for a new vehicle was $40,634 in Q1 2024, a decrease of $481 from the previous year. The average loan amount for a used vehicle also decreased by $498 over the same period, reaching $26,073. However, despite the decline in average loan amounts, elevated interest rates caused slight increases in average monthly payments. The average interest rate for new vehicles was 6.73% in Q1 2024, up from 6.61% the previous year. The average interest rate for used vehicles also experienced an increase, reaching 11.91% in Q1 2024, up from 11.40% over the same period.
In a surprising finding, the report indicated that a significant percentage of new vehicle loan payments were over $1,000 in Q1 2024, pointing to a higher spending trend among consumers. Conversely, a large portion of used vehicle loans were under $400 in the same quarter.
Interest in electric vehicles (EVs) continued to grow, accounting for 8.56% of all new vehicle financing in Q1 2024. The report also showed a higher rate of leasing for EVs than in previous years. With more manufacturers introducing a wider range of EV models and tax incentives becoming more accessible, there has been a notable increase in consumer interest in the EV market, particularly in terms of leasing.
Experian’s report provided additional insights, including the continued dominance of prime and super prime borrowers, changes in lender market share, and the evolving preferences for vehicle types.
The State of the Automotive Finance Market Report: Q1 2024 offers a comprehensive overview of the latest trends and developments in the automotive finance industry, providing valuable insights for industry professionals and consumers alike.
For those seeking further in-depth information, the full report is available on demand.
About Experian:
Experian is a global data and technology company that plays a crucial role in transforming various sectors, including lending, fraud prevention, healthcare, and digital marketing. With a commitment to leveraging data, analytics, and software to drive innovation, Experian serves diverse markets, contributing to positive changes in the industry.
As a reputable FTSE 100 Index company based in Dublin, Ireland, Experian continues to invest in talent and advanced technologies to unlock the true potential of data and drive meaningful innovation.
As the automotive finance market undergoes significant changes, Experian remains at the forefront of providing valuable insights and analysis to guide industry professionals and consumers through the evolving landscape.
For more information about Experian and its mission, please visit experianplc.com.
Contact:
Jordan Takeyama
Experian Public Relations
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