Used vehicles continue to be the preferred option for car shoppers

New report shows used vehicles make up 55.15 percent of all vehicle financing; average monthly payment for a used vehicle reaches $393

Schaumburg, Ill., December 05, 2019 — Used vehicles are commanding a larger share of the U.S. automotive finance market, according to Experian’s Q3 2019 State of the Automotive Finance Market report. Used financing increased 2.4 percent year-over-year, reaching 55.15 percent in Q3 2019, compared to 53.86 percent in Q3 2018. The trend appears to be driven by a number of factors, including a higher percentage of prime customers financing used vehicles and an increased availability of late-model vehicles.

While used vehicle loans saw growth in Q3 2019, the most significant shift was in the super prime segment, increasing 3.3 percent to reach 13.42 percent during the quarter. As a whole, prime and super prime consumers make up 51.24 percent of used loans—the highest percentage since Q3 2009. Even when financing used vehicles, consumers continue to lean toward longer payment terms, with used terms clocking in at 64.89 months, and average new vehicle loan terms reaching 69.28 months.

“Consumers appear to be realizing that financing a used vehicle can be an optimal choice—particularly as they look to improve their financial health. With so many late model vehicles, used vehicles can offer similar features to new vehicles but at a lower cost,” said Melinda Zabritski, Experian’s senior director of automotive financial solutions. “Understanding these trends can help lenders and dealers ensure they have the right options available for consumers.”

As prime consumers continue to shift to used, they’re also shifting where they shop for vehicles. Independent dealers saw an increase in prime and super prime financing, with both segments making up 37.92 percent of loans in Q3 2019, compared to 34.87 percent a year ago. Independent dealers also saw an increase in average used loan terms, from 60.86 months in Q3 2018, to 62.59 months in Q3 2019.

Other attributes in the auto finance market

Average vehicle loan amounts continued to increase across the board. The average loan amount for a new vehicle increased 3.8 percent to reach $32,480, while the average used loan amount increased 2.3 percent to reach $20,466. The average monthly payments continue to remain high in Q3. The average monthly payment for a new vehicle was $550, while the average monthly payment for a used vehicle reached $393.

The average credit scores have also seen significant improvement over the past four years. The average credit score for a new vehicle increased 10 points from Q3 2015 to reach 725. Similarly the average credit score for a used vehicle increased 12 points during the same time period to reach 662.

“Credit scores are one of the critical factors that can determine loan terms and interest rates when shopping for a vehicle loan, so consumers should be sure their credit is in the best shape possible before they’re in the market,” Zabritski said. “In addition to traditional methods to improve a credit score, like making payments on time, consumers should leverage new tools like Experian Boost to get their credit ready for a vehicle purchase.”

Additional findings for Q3 2019:

  • Outstanding automotive loan balances totaled $1.22 trillion.
  • 30-day delinquencies remained stable at 2.25 percent, decreasing for all lenders but finance companies.
  • Used leasing saw a slight increase from 3.88 percent in Q3 2018 to 4.07 percent in Q3 2019.
  • Average loan terms saw increases in both the 61 – 72 month (41 percent new, 42.9 percent used) and 73 – 84 (30.9 percent new, 19 percent used) month segments
  • Interest rates rose across all risk segments (5.96 percent for new vehicles and 9.57 percent for used).
  • The average price difference in monthly payments between loans and leases is $101.

To view the entire Q3 2019 State of the Automotive Finance Market report webinar, visit

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