Both 30- and 60-day auto delinquencies dropped in Q4 2010, according to Experian Automotive
Additionally, share of nonprime and subprime auto loans continued to grow
Schaumburg, Ill., Feb. 24, 2011 — Experian Automotive today announced findings from its quarterly analysis of the automotive credit industry. Findings from the Q4 2010 report show that automotive credit continued to strengthen as 30- and 60-day loan delinquencies exhibited sharp declines. Thirty-day delinquencies dropped by 9.71 percent, from 3.30 percent in Q4 2009 to 2.98 percent in Q4 2010. Sixty-day delinquencies dropped 15.26 percent, from 0.94 percent in Q4 2009 to 0.79 percent in Q4 2010.
“The automotive credit market showed a significant improvement year over year during the fourth quarter of 2010,” said Scott Waldron, president of Experian Automotive. “Consumers are definitely doing a better job of making their payments on time, and that bodes well for everyone in the automotive and automotive credit businesses. We continued to see lenders loosening credit during the quarter for nonprime and subprime customers, who represent a significant portion of the automotive market.”
Findings from the report also show that the share of loans to credit-challenged new vehicle shoppers grew by 18.2 percent in Q4 2010 compared with Q4 2009. Share of loans to nonprime customers rose from 9.75 percent in Q4 2009 to 11.14 percent in Q4 2010. For subprime customers, share of loans jumped from 5.6 percent to 6.96 percent, while share of loans to deep-subprime customers rose from 1.44 percent to 1.74 percent.
For both new and used vehicles, the share of loans to nonprime, subprime and deep-subprime customers was up from 36.42 percent in Q4 2009 to 38.42 percent in Q4 2010. However, this still trails Q4 2007 and Q4 2008, when loan share for credit-challenged customers was 44.63 percent and 41.03 percent, respectively.
“The automotive lending industry continues to gather positive momentum,” said Melinda Zabritski, director of automotive credit for Experian Automotive. “The sharp drop in delinquencies is helping create stability in the marketplace and allowing lenders to develop a more aggressive approach. It is still a much more conservative lending climate than we saw in 2007 and 2008, but lenders are definitely becoming less risk averse.”
In other findings:
• The average credit score for a new vehicle customer in Q4 2010 fell by eight points to 767 from 775 in Q4 2009
• The average credit score for used vehicle customers in Q4 2010 was 679, down just one point from Q4 2009
• The average loan amount for a new vehicle jumped to $25,789 in Q4 2010 from $25,580 in Q4 2009
• The average loan amount for a used vehicle jumped to $16,992 in Q4 2010 from $16,281 in Q4 2009
Experian Automotive’s quarterly credit trend report features market data and analysis from its 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 http://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.
Experian Public Relations
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About Experian Automotive
Experian Automotive is a leader in providing information services and market intelligence to manufacturers, dealers, finance, insurance and aftermarket companies, helping them increase customer loyalty; target and win new business; and make better lending, purchasing and production decisions. Experian’s AutoCheck® reports provide customers with in-depth vehicle history information to confidently understand, compare and select the right vehicle. Its North American Vehicle DatabaseSM houses more than 650 million vehicles and, when combined with Experian’s credit, consumer and business information assets, meets the industry’s growing demand for an integrated information source. Experian technology supports top automotive businesses, including eBay Motors, O’Reilly Auto Parts, Affinia, 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 90 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, 2010, 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.
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