According to Experian, captives accounted for the largest new vehicle market share in the first quarter. Melinda Zabritski, Experian’s head of automotive financial insights, will join us on the latest edition of CBT Now to share more details of the State of the Automotive Finance Market Report for the first quarter.
Key Takeaways
1. Melinda Zabritski highlights the dominance of captives in the new vehicle market share during the first quarter, driven by incentives and lower interest rates that appealed to consumers. This trend reflects a significant shift in market dynamics and consumer preferences.
2. The rebound in new vehicle inventory has led to an increase in leasing, with leasing percentages returning to levels seen about 15 years ago. This indicates a more balanced inventory situation and offers consumers more options in terms of financing and vehicle acquisition.
3. Both new and used loan amounts are stabilizing, with average monthly payments for new cars hovering around $732 to $735. Despite slight reductions in loan amounts, high interest rates contribute to maintaining payments in the $700 range. Shorter loan terms are also becoming more common as consumers seek to minimize interest payments.
4. Moreover, Zabritski touches on the increase in delinquency rates, reflecting broader economic challenges such as inflation and rising gas prices. While delinquency rates are lower than the previous quarter, they remain relatively high compared to recent years, prompting lenders to monitor credit portfolios and risk management strategies closely.
5. Despite challenges like rising delinquencies, the automotive finance market is showing signs of stabilization. The market’s ability to withstand economic pressures and maintain consumer demand for vehicles bodes well for an intense summer of selling, indicating resilience and adaptability within the industry.
"The market is doing well. Consumers are out buying cars, and lenders are financing." - Melinda Zabriski.
