Experian Automotive: Historically high loan terms and low interest rates kept monthly auto payments down in Q4 2012

Experian Automotive: Historically high loan terms and low interest rates kept
                    monthly auto payments down in Q4 2012

PR Newswire

SCHAUMBURG, Ill., March 5, 2013

SCHAUMBURG, Ill., March 5, 2013 /PRNewswire/ -- Experian Automotive today
released that average loan terms for a new vehicle in Q4 2012 jumped to an
all-time high of 65 months, up from 63 months in Q4 2011. Terms for used
vehicles stayed flat at 60 months. Findings from the Q4 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.

"Overall, Q4 2012 was a very favorable time for consumers to buy a new or used
vehicle in terms of overall monthly payments," said Melinda Zabritski,
director of automotive credit for Experian Automotive. "Lower interest rates
and longer loan terms made it easier for consumers to finance a vehicle while
keeping their payments affordable. This, combined with the fact that more
vehicle loans went to consumers with credit outside of prime, portends a vital
and healthy automotive market."

The report also showed that the average loan amount for a new vehicle was
$26,691 in Q4 2012, up $272 from Q4 2011, while the average used vehicle loan
was $17,629 in Q4 2012, up $239 from Q4 2011.

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 Q4
2012 dropped to 4.36 percent, from 4.52 percent in Q4 2011, while the average
interest rate for a used vehicle loan dropped to 8.48 percent, from 8.67
percent in Q4 2011. Additionally, the average monthly payment for a new
vehicle dropped from $468 in Q4 2011 to $460 in Q4 2012.

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.

In other findings from the Q4 2012 report:

  oAutomotive loans for new vehicles with terms from 73 to 84 months
    increased by 19.4 percent over Q4 2011
  oNew lease share of new financing increased to 24.79 percent, up from 10.45
    percent in Q4 2011
  oThe total subprime market for all new vehicle financing increased by 9.7
    percent to 24.77 percent, up from 22.59 percent in Q4 2011
  oThe total subprime market for all used vehicle financing increased by 3.4
    percent to 55.4 percent, up from 53.58 percent in Q4 2011
  oBuy Here/Pay Here (BHPH) organizations and credit unions showed the
    strongest market share growth of 4.3 percent and 3.9 percent for overall
    automotive loans
  oBanks have the highest market share of automotive loans at 41.2 percent

Experian Automotive's quarterly credit trend analysis features market
reporting data and analysis from its AutoCount^® Risk Report, which analyzes
automotive lending markets based on a uniform measurement of credit quality
that segments markets by geography, credit score and vehicle registrations,
among other factors. It also incorporates data from the Experian–Oliver Wyman
Market Intelligence Reports, which provide topical, quarterly analysis; peer
benchmarking options; and commentary on key issues facing the financial
services industry.

About Experian Automotive
Experian Automotive provides information services and market intelligence that
enables results-driven professionals to gain the fullest possible
understanding of the market, the vehicles and the people who buy them. Its
North American Vehicle Database^SM houses data on nearly 700 million vehicles
and, when combined with Experian's credit, consumer and business information,
provides an integrated perspective into the automotive marketplace. Experian
Automotive's AutoCheck^® vehicle history reports provide dealers and consumers
with in-depth information, allowing them to confidently understand, compare
and select the right vehicles. For more information on Experian Automotive and
its suite of services, visit our Website at www.ExperianAutomotive.com.

About Experian
Experian^® is the leading global information services company, providing data
and analytical tools to clients around the world. The Group helps businesses
to manage credit risk, prevent fraud, target marketing offers and automate
decision making. Experian also helps individuals to check their credit report
and credit score, and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a
constituent of the FTSE 100 index. Total revenue for the year ended March 31,
2012 was $4.5 billion. Experian employs approximately 17,000 people in 44
countries and has its corporate headquarters in Dublin, Ireland, with
operational headquarters in Nottingham, UK; California, US; and São Paulo,
Brazil.

For more information, visit www.experianplc.com.

Experian and the Experian marks used herein are service marks or registered
trademarks of Experian Information Solutions, Inc. Other product and company
names mentioned herein are the property of their respective owners.

Contact:
Roslyn Whitehurst
Experian Public Relations
1 714 830 5578
roslyn.whitehurst@experian.com
Twitter: @RozWhitehurst

SOURCE Experian Automotive

Website: http://www.experianautomotive.com
 
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