In news that will shock precisely no one, the current car blitz is partially fueled by longer loan rates, higher monthly payments and an increasing prevalence to finance our new cars from the automaker themselves — when we’re not renting it from them in the first place.
Experian released Wednesday its data on third-quarter sales and financing and found, on average, that borrowers’ credit scores were at the lowest level since before 2008. According to the credit agency, car buyers had an average credit score of 710 when they financed their car — which happens in 86.6 percent of car transactions, an all-time high.
Buyers opted for longer loans too. According to the data, new car loans longer than six years increased to 27.5 percent for the third quarter, up 17.1 percent from the same period last year. Loans between five and six years accounted for 44 percent of new vehicle financing. (Read More…)
Red-hot auto sales and increasingly pricey cars are generally seen as a sign of a resurgent economy and a consumer base that is finally prospering after years of stagnant wages and poor prospects. But according to data from Experian, much of the growth may come from practices generally regarded as financially unhealthy.
The latest Q2 2014 data from Experian was released this week, and key metrics like repossessions, loan delinquencies and outstanding balances have all seen increases.
The Detroit Free Press paints a pretty clear picture of the automotive lending landscape: auto loan terms are rising, with 1 in 5 loans now lasting longer than 6 years. At the same time, the average credit score for those taking out loans is dropping. Ominous signs for a car market that’s running on the hype of a perpetually increasing SAAR, right? Well, not according to some.
Bad news on the subprime front, as credit rating agency Experian reports a rise in delinquencies and repossessions for auto loans in Q1 2013.
Melinda Zabritski offered a rather dubious explanation for the nearly 17 percent rise in repos (as well as the 1.3 percent uptick in 30 day delinquencies and 12.4 percent rise in 60-day delinquencies) (Read More…)
Long-term auto loans, leasing and sub-prime financing all saw increases year-over-year from 2011 to 2012, according to a report by Experian, a consumer credit rating agency. While typically a dry and detail-oriented subject, the area of auto financing gives us some insight into the nature of the new car market and even the economy itself.