BUY HERE PAY HERE LOTS STRONGEST MARKET SHARE

Latest News New Car Terms Hit High; Used Terms Flat Experian Automotive released data that shows average loan terms for a new vehicle in the fourth quarter jumped to an all-time high of 65 months, up from 63 months in the fourth quarter of 2011. Terms for used vehicles stayed flat at 60 months. Findings from the State of the Automotive Finance Market analysis showed that the average interest rate for new and used vehicle loans dropped in Q4, and average monthly payments dropped versus the same time period in Q4 2011. The report also showed that the average loan amount for a new vehicle was $26,691 in the fourth quarter, up $272 from the fourth quarter of 2011, while the average used vehicle loan was $17,629, up $239. However, while consumers are taking out larger loans, lower interest rates and longer loan terms for new vehicles helped bring down the average monthly payments. For example, the average interest rate for a new vehicle loan in the fourth quarter dropped to 4.36 percent, from 4.52 percent in the fourth quarter of 2011, while the average interest rate for a used vehicle loan dropped to 8.48 percent, from 8.67 percent. Additionally, the average monthly payment for a new vehicle dropped to $460 from $468. More consumers also were able to obtain financing in Q4, as average credit scores for both new and used vehicles dropped. For new vehicle loans, the average consumer credit score was 755 in Q4 2012, down six points from Q4 2011. For used vehicle loans, the average consumer credit score dropped to 665 in Q4 2012, down five points from Q4 2011. Automotive loans for new vehicles with terms from 73 to 84 months increased by 19.4 percent over the fourth quarter of 2011. New lease share of new financing increased to 24.79 percent, up from 10.45 percent. The total subprime market for all new vehicle financing increased to 24.77 percent, up from 22.59 percent in the fourth quarter of 2011. The total subprime market for all used vehicle financing increased to 55.4 percent, up from 53.58 percent. Buy-here, pay-here organizations and credit unions showed the strongest market share growth of 4.3 percent and 3.9 percent for overall automotive loans. Banks have the highest market share of automotive loans at 41.2 percent.