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Experian Data and Insights

Total outstanding automotive loan balances reach all-time high; subprime and deep subprime market share remain at low levels

Schaumburg, Ill., February 19, 2015

Experian Automotive today announced that the total outstanding balance on open automotive loans continued to rise in the fourth quarter of 2014, reaching an all-time high of $886 billion. According to its latest State of the Automotive Finance Market report, the volume of open loans increased across all risk tiers. However, despite the increases in volume, market share for subprime and deep subprime loans remained at relatively low levels, as much of the growth from a year ago was seen in the super-prime risk segment.

“Whenever there is an uptick in the number of loans to subprime and deep-subprime customers, there is the potential for a ‘sky is falling’ type of reaction,” said Melinda Zabritski, Experian’s director of automotive finance. “The reality is we are looking at a remarkably stable automotive-loan market, in part because consumers are continuing to stay on top of their payments. With that said, keeping an eye on consumer payment behavior and the lending community’s appetite for risk is important because these types of insights help the industry make better decisions that may affect loan terms or interest rates in the future.”

While the volume of loans in the subprime and deep-subprime risk tiers were up from last year — 3.83 percent and 5.60 percent, respectively — the combined market share for the two was down slightly at 20.31 percent. On the other end of the spectrum, the volume of loans to super-prime consumers was up 7.90 percent from a year ago. It also was the only risk tier to see a year-over-year increase in market share.

Further findings from the report showed that 30- and 60-day automotive loan delinquencies remained flat during the quarter. Thirty-day delinquencies were up just 1 basis point from a year ago, going from 2.61 percent to 2.62 percent, while 60-day delinquencies dropped slightly, going from 0.73 percent 0.72 percent over the same time period.

At a state level, the highest delinquency rates were found primarily in the South, while the states with the lowest rates were typically found in the Midwest and Northwest. 

30-day delinquencies

Highest

Lowest

Mississippi 4.46 percent North Dakota 1.23 percent
Washington, D.C. 3.68 percent Alaska 1.47 percent
Louisiana 3.59 percent Minnesota 1.48 percent
South Carolina 3.52 percent Oregon 1.48 percent
Alabama 3.49 percent South Dakota 1.52 percent

60-day delinquencies

Highest

Lowest

Washington, D.C. 1.47 percent North Dakota 0.33 percent
Mississippi 1.27 percent Minnesota 0.39 percent
Louisiana 1.15 percent Oregon 0.39 percent
Alabama 1.03 percent Washington 0.40 percent
South Carolina 0.99 percent Alaska and New Hampshire 0.44 percent

Experian’s quarterly State of the Automotive Finance Market report leverages information from its AutoCount® database, which enables insights into the automotive-lending market by geography, credit score and vehicle registrations, among other factors. For more information on the latest State of the Automotive Finance Market report, please visit http://bit.ly/1LbNl1K

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 DatabaseSM 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. Experian Automotive’s AutoCheck® vehicle history reports provide dealers and consumers with in-depth information, allowing them to confidently understand, compare and select the right vehicles. For more information on Experian Automotive and its suite of services, visit our Website at http://www.experian.com/automotive.

About Experian

We are the leading global information services company, providing data and analytical tools to our clients around the world. We help businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. We also help people to check their credit report and credit score, and protect against identity theft. In 2014, we were named by Forbes magazine as one of the “World’s Most Innovative Companies.”

We employ approximately 16,000 people in 39 countries and our corporate headquarters are in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.

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Contact:
Roslyn Whitehurst
Experian Public Relations
1 714 830 5578
roslyn.whitehurst@experian.com
Twitter: @RozWhitehurst