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At
the same time, average credit scores for consumers who financed
new and used vehicles are higher, and delinquency rates are
lower, indicating a healthy auto credit market overall, the
study found. Experian, an information services company, gathers
data on consumer and business credit and generates credit
scores, among other services.
"Consumers are increasingly purchasing SUVs, CUVs and pickups.
It's driving loan amounts up and payments up," said Melinda
Zabritski, Experian's senior director of automotive financial
solutions. CUV is an acronym for car-like, crossover utility
vehicles such as the Toyota RAV4, a best seller in the category.
Average credit scores for new and used vehicle buyers rose in
the first quarter, and the average used car buyer now has a
prime level credit rating of 663, Experian said. The share of
consumers with sub-prime credit scores dropped to a new record
low of just over 17%.
More than 56% of new vehicles financed in the first three months
of 2021 were SUVs, and another 17% were pickup trucks. The
average amount financed to buy a new vehicle rose to $35,392 in
the first quarter from $33,833 a year earlier.
The share of new vehicle loans longer than 72 months rose to
just over 35% of the total from just under 32% a year earlier.
Used-vehicle lending showed a similar pattern of more borrowed
on average for longer periods.
In the past, lengthening loan terms raised yellow flags among
auto credit market-watchers. But Experian found the share of
delinquent loans - where borrowers were 60 days behind on
payments - fell in the latest quarter to 0.54% from 0.67% a year
ago, and 0.68% in the first quarter of 2019, before the onset of
the pandemic.
"I don’t see anything in the industry itself that would be a
cause for alarm," Zabritski said.
(Reporting by Joe White in Detroit; Editing by Matthew Lewis)
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