SCHAUMBURG, Ill., June 6, 2019 /PRNewswire/ -- More and more prime and super-prime car shoppers in the market for their next vehicle are electing to buy used, according to new research from Experian. Findings from the Q1 2019 State of the Automotive Finance Market report show that the percentage of prime (61.88 percent) and super-prime (44.78 percent) consumers choosing used vehicles reached an all-time high.
This trend comes as questions around vehicle affordability continue to dominate industry conversations. The average loan amount for a new vehicle surpassed $32,000 in Q1 2019, while the average loan amount for a used vehicle was slightly above $20,000. Additionally, the average monthly payment for a new vehicle was $554, and the average monthly payment for a used vehicle was $391.
"While vehicle affordability continues to be top of mind for the industry, consumers are actively seeking ways to ensure they can afford the vehicle they purchase — a positive sign for all parties involved," said Melinda Zabritski, Experian's senior director of automotive financial solutions. "It's important that lenders and dealers continue to monitor these trends so they can work with car shoppers to help them find the right vehicle with the right financing options."
The other side of the affordability conversation has focused on delinquency trends. In Q1 2019, 30-day delinquencies saw an increase to 1.98 percent, up from 1.9 percent a year ago. That said, banks, credit unions and finance companies all saw slight decreases in 30-day delinquency rates, and 60-day delinquencies remained relatively stable at 0.68 percent year-over-year. It's important to keep in mind that the 30-day delinquency rate is still below the high-water mark in Q1 2009 (2.81 percent).
"The delinquency rate is certainly a trend worth keeping an eye on, but it's important to consider it within the larger historical context," Zabritski said. "Other factors, like subprime originations remaining at historic lows, help paint the full picture of the industry."
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