New vehicle loans for subprime consumers increase by 22.4 percent in Q2 2011,according to Experian Automotive
Average credit scores continue to decrease, and at-risk auto loans drop by $4.1 billion
Schaumburg, Ill., Aug. 30, 2011 — Experian Automotive today announced that lenders continued to increase their appetite for risk in Q2 2011, with new vehicle loans for customers with credit outside of prime increasing by 22.4 percent, when compared to the previous year. In Q2 2011, 22.29 percent of all new vehicle loans went to customers in the non-prime, subprime and deep subprime categories, increasing from 18.21 percent in Q2 2010.
The largest percentage increase in new car loans was in the category with the highest risk, deep subprime, which jumped 44.1 percent, moving from 1.48 percent of all new vehicle loans in Q2 2010 to 2.13 percent in Q2 2011.
Additional findings from the Q2 automotive credit trends report show that the average customer credit score for both new and used vehicle loans dropped by 10 and eight points, respectively. For new vehicle loans, the average fell from 772 in Q2 2010 to 762 in Q2 2011. For used vehicle loans, the average fell from 679 in Q2 2010 to 671 in Q2 2011.
“Even with a tepid economic recovery in the first half of the year, automotive lenders were willing to increase their level of risk,” said Melinda Zabritski, director of automotive credit for Experian Automotive. “This was good news for automotive manufacturers, as nearly half of all consumers fall into non-prime, subprime and deep subprime risk categories. Providing loans to these risk tiers opens the market to significantly more prospects.”
The total dollar volume of automotive loans that were 30- or 60-days delinquent dropped from nearly $21 billion in Q2 2010 to $16.9 billion in Q2 2011. Thirty-day delinquencies dropped by 10.39 percent from 2.89 percent in Q2 2010 to 2.59 percent in Q2 2011. Sixty-day delinquencies dropped by 14.46 percent, from 0.71 percent in Q2 2010 to 0.6 percent in Q2 2011.
In other findings:
• Quarterly repossession rates dropped by 4.2 percent, from 0.62 percent in Q1 2010 to 0.59 percent in Q2 2011
• The average loan amount for a new vehicle was up $17, from $25,223 in Q2 2010 to $25,240 in Q2 2011
• The average loan amount for a used vehicle jumped $476, from $16,586 in Q2 2010 to $17,062 in Q2 2011
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.
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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 80 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, 2011, was $4.2 billion. Experian employs approximately 15,000 people in 41 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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