Experian’s Melinda Zabritski explores findings from Q3 State of Automotive Finance report

Despite vehicle price increases, 30 and 60-day delinquency rates are low, according to Experian’s Q3 State of the Automotive Finance Market report. So, what could this mean as we approach the new year? On today’s show, we’re pleased to welcome back Melinda Zabritski, Senior Director of Automotive Financial Solutions for Experian to take a closer look at the report and some other key findings.

Zabritski says they saw a continuation of many trends, such as a reduction in subprime. This is a trend that has been ongoing. Inventory has had such an impact on the industry, with the biggest impact they have seen this quarter. This has also caused increases in monthly payments for both new and used vehicles. Zabritski says one of the findings that surprised her was the year-over-year increase. For used vehicles, the year-over-year was up 20%, and loan amounts to over $26,000.

Another thing that’s been really interesting, this year especially is, the current value of used cars is higher today than they were when the vehicles were brand new, says Zabritski. She says it’s putting them in a better equity position.

Credit scores are starting to stabilize. They are still in the mid 700s, for average new credit scores, upper 600 for used. Zabritski says, she did see the loan-to-value come down, especially for used cars. She says this was the first they have seen loan to value of used cars, lower than they were on new. On new vehicles, the loan to value increased, slightly.

For new vehicles, 60% of the market is SUVs, and for the used vehicles, the 2018 model is dominant. Zabritski says it’s a lot of trucks and a lot of SUVs. Hybrids are looking more like your typical gas-typed flex vehicle. She thinks that’s due to a greater availability, as we have more options, allowing prices to go down.

Zabritski says their volumes are down some for both new and used vehicles. She believes we’ll have a lot of pent-up demand going into 2022 and hope it levels out. We may see those special and new end-of-the-year deals.

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