Schaumburg, Ill., March 9, 2010 — The total dollar value of at-risk automotive loans fell to $26.58 billion in Q4 2009, a 10 percent drop from $29.58 billion in Q4 2008, according to a quarterly analysis of automotive credit released today by Experian Automotive.
While still rising, the growth rates for 30-day and 60-day delinquencies saw only minimal increases in Q4 2009. The 30-day delinquency rate rose just 1 percent from Q4 2008 to Q4 2009 (3.31 percent to 3.34 percent delinquencies). The 60-day delinquency rate rose 3.5 percent from Q4 2008 to Q4 2009 (0.93 percent to 0.96 percent delinquencies).
The drop in total dollars at risk and the deceleration of delinquency rates are positive signs for the automotive lending industry. While some of the drop in total dollars at risk is attributable to lower loan volumes over the past two years, a significant portion is due to more conservative lending practices since late 2008.
“While delinquencies are still higher than the industry would like, we have not seen an alarming run-up in delinquencies like we did a year ago,” said Scott Waldron, president of Experian Automotive. “These are positive signs that the automotive lending industry is getting back on solid footing.”
There was a slight loosening of credit for used vehicle financing in Q4 2009 compared with Q3 2009. In Q4 2009, subprime (combining nonprime, subprime and deep subprime) financing was 36.42 percent, up from 33.99 percent in Q3 2009, spurred primarily by used vehicle sales. New vehicle sales saw a 0.7 percent decrease in subprime loans, dropping from 16.91 percent of new vehicle loans financed in Q3 2009 to 16.79 percent in Q4 2009.
“While the lion’s share of the new car market is being driven by prime lending, loans for subprime customers are still out there, especially in the used market, if customers and automotive retailers know where to look,” said Melinda Zabritski, director of automotive credit for Experian Automotive. “Understanding which lenders have programs specific to these markets can make a big difference in getting customers with credit challenges into a vehicle.”
Other findings include the following:
A market insight snapshot featuring a more detailed analysis of Experian Automotive’s findings can be downloaded at http://www.experian.com/automotive/auto-resources.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.
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.
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.
DeVilling Group for Experian Automotive
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