U.S. Automotive Lending Industry Showing Signs of Stabilization, According to Experian Automotive

Growth rate for 30-day loan delinquencies is slowing, average credit scores for new and used vehicle loans rising, loan terms shortening

Schaumburg, Ill., Dec. 9, 2009 — Despite continued economic struggles, the automotive lending industry in the U.S. showed signs of stabilization during the third quarter of 2009, according to a quarterly analysis of automotive credit released today by Experian Automotive.

The growth rate for 30-day delinquencies, while still rising, has slowed significantly. The 30-day delinquency rate rose 5.8 percent from the third quarter of 2008 to the third quarter of 2009 (3.14 percent to 3.32 percent delinquencies). The growth rate from third quarter 2007 to third quarter 2008 was 9.5 percent.

“We are seeing signs of stabilization in the automotive lending market that could spell good overall health for the auto industry in the long run,” said Scott Waldron, president of Experian Automotive. “Lending institutions are making less risky loans right now. As some of the higher-risk loans from a few years ago come off the books, lenders will be in a much better position to serve the automotive market.”

The average credit score for new vehicle loans in the third quarter of 2009 was 775, up from 762 in the third quarter of 2008, showing that lenders are pulling back from riskier loans. Average credit scores for used vehicle loans also rose to 684 in the third quarter of 2009 from 670 in the third quarter of 2008. In addition, the average new vehicle loan dropped from 63 months in the third quarter of 2008 to 62 months in the third quarter of 2009, and the average used vehicle loan dropped from 59 months in the third quarter of 2008 to 57 months in the third quarter of 2009.

“While higher-than-average delinquency rates are still with us, and may be for some time, the fact that the rate of increase is slowing is definitely some positive news for an industry that hasn’t had much as of late,” said Melinda Zabritski, director of Automotive Credit for Experian Automotive. “These slowing delinquency rates, along with several other trends we are now seeing, should provide some cautious optimism for the market.”

In other findings:

  • Loans 60 days past due were up 13.4 percent year over year in the third quarter of 2009. Automotive loans 60 days past due rose to 0.95 percent from 0.84 percent.
  • Toyota Financial Services had the highest market share for new vehicle loans (11.2 percent), followed by Chase Auto Finance (11.1 percent), GMAC (9.1 percent) and Ford Motor Credit (7.1 percent).
  • Wachovia Dealer Services (5.7 percent), Chase Auto Finance (4.5 percent), Toyota Financial Services (3.0 percent) and Capital One Auto Finance (1.8 percent) have the highest market share for used vehicle loan originations.
  • The states with the highest average credit score for new vehicle loans were Minnesota (804), Wisconsin (796), Washington (793), Iowa (792) and Connecticut (789).
  • The states with the highest average credit score for used vehicle loans were Wisconsin (733), New Hampshire (731), Minnesota (731), Connecticut (730) and North Dakota (729).

A market insight snapshot featuring a more detailed analysis of Experian Automotive’s findings can be downloaded at http://www.experian.com/forms/auto-credit-trend-analysis.html.

Experian Automotive’s quarterly credit trend analysis features market reporting data and analysis from Experian Automotive’s AutoCount® Risk Report, which analyzes automotive lending markets based on a uniform measurement of credit quality that segments markets by geography, credit score and vehicle registrations, among other factors. For more information on Experian Automotive’s AutoCount Risk Report, visit https://www.autocount.com. It also incorporates data from the Experian–Oliver Wyman Market Intelligence Reports, which provide topical, quarterly analysis; peer benchmarking options; and commentary on key issues facing the financial services industry. To subscribe to the Experian–Oliver Wyman Market Intelligence Reports, go to http://www.marketintelligencereports.com. VantageScore®, a tri-bureau credit score, was used to provide average risk scores for the population segments.

About Experian Automotive
Experian Automotive, a part of Experian, delivers information services to manufacturers, dealers, finance and insurance companies, and consumers. Experian® helps automotive clients increase customer loyalty, target and win new business, and make better lending and vehicle purchase decisions. Its National Vehicle Database, housing more than 625 million vehicles, along with Experian’s credit, consumer and business information assets, meets the industry’s growing demand for an integrated information source. Experian’s advanced decision support services help clients turn this information into improved business results. Experian technology supports top automotive businesses, including eBay Motors, CarsDirect.com, CarMax and NADAguides.com. For more information on Experian Automotive and its suite of services, visit our Website at http://www.experianautomotive.com.

About Experian
Experian® is the leading global information services company, providing data and analytical tools to clients in more than 65 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2009, was $3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and São Paulo, Brazil.

For more information, visit http://www.experianplc.com.

Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc.

Other product and company names mentioned herein may be the trademarks of their respective owners.

Mike DeVilling
DeVilling Group for Experian Automotive
1 248 875 4207
mjdevilling@yahoo.com Email

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