Experian’s Q4 2020 State of the Automotive Finance Market report put alternative fuel financing in the spotlight. Today on CBT News, Melinda Zabritski, Senior Director of Automotive Financial Solutions at Experian, joins the show to discuss key findings from the report such as record-breaking auto loans and their influence on the industry.
Zabritski begins the conversation by discussing trends associated with the 2020 Q4 report. She says that despite the unusual nature of 2020, the auto market performed well as consumers continued to shop for vehicles. There were a few disruptions in the market as leasing declined in 2020 and many consumers moved back into the new car market.
Experian’s research found that new vehicle loans reached a record high of $576 on average for monthly payments. For used vehicles, it was the first time that the average loan surpassed $400. Zabritiski says that continued incentives play a major role in car buyers taking out bigger loans.
Zabritski then discusses the growth of alternative fuel vehicles and how they are impacting the industry. She says that electric and hybrid vehicles combined to account for 6.7% of vehicles financed, a tremendous increase from 3% only three years ago.
Zabritski concludes the conversation by discussing the growing popularity of long-term loans. She says that many auto loans are exceeding six years, with some lasting as long as eight years. Flat rates and other incentives from OEMs have contributed to more people being willing to pay for a longer-term. Zabritski says she has seen loan incentives that have offered as low as 0% for 84 months.
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