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Friday, 20 August 2021 17:26

New Vehicle Financing Returning to Pre-Pandemic Levels, Experian Report Finds

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While the automotive finance market remained resilient amid the pandemic, it saw its fair share of change.

Now, more than a year later, the industry is returning to more normal levels, particularly in regards to new vehicle financing, according to Experian’s latest State of the Automotive Finance Market report.

 

New vehicles represented a larger portion of financing in Q2 2021 at 44.81% compared to 38.05% in Q2 2020.

 

Average new vehicle loan amounts decreased to $35,163 in Q2 2021, down from the record high of $36,121 in Q2 2020. Last year’s spike was driven by an increase in financing of full-size pickup trucks, which was likely sparked by the availability of incentives.

 

Though the average loan amount decreased in Q2 2021, the average monthly payment did see a minor increase from $570 to $575 year-over-year. This was caused by a slight decrease in average term and an increase in average loan rate, both also reflective of the market returning to pre-pandemic levels.

 

The average new vehicle loan term was 69.36 months in Q2 2021, down from 71.31 months in Q2 2020, while the average new vehicle loan rate was 4.09% in Q2 2021, compared to 3.95% in Q2 2020.

 

“As we look at this quarter’s data, it’s important to remember that Q2 2020 is when we started to see the impact of the pandemic on the automotive finance market, so we’re comparing to an anomalous quarter,” said Melinda Zabritski, Experian’s senior director of automotive financial solutions. “Incentives played a large role in keeping the market moving in 2020, and those haven’t been as prevalent in 2021, which explains...


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