||Vehicle Leasing Beats Expectations, Buoyed by Volume Brands
Leasing hit a high point in the first quarter, helped by lower monthly payments, Experian Automotive says.
"It certainly was higher than I was expecting to see it," says Melinda Zabritski, senior director of automotive credit for Experian Automotive. In the first quarter this year, leasing accounted for 27.5 percent of new-vehicle originations, the highest since Experian started keeping track in 2006, she said.
The latest figure was a substantial increase since the first quarter of 2012, when it was 24.4 percent, and the fourth quarter of 2012, when it was 24.8 percent.
For the first quarter, Experian said the average monthly lease payment for new vehicles was $414, down from $424 a year earlier. "It's no wonder leasing is higher," Zabritski told Automotive News.
For loans, the average new-vehicle loan payment was $459, down from $462 a year earlier, Experian said. But loan terms have been growing, at 65 months in the first quarter, up one month from a year ago.
Big-volume brands accounted for a lot of lease volume in the quarter. People sometimes forget leasing is a factor for mass-market brands because lease penetration is so much higher for luxury brands, Zabritski said.
She said the most commonly leased vehicle in terms of unit volume is one of the biggest sellers overall -- the Honda Accord.
Toyota Financial Services and American Honda Finance were No. 1 and No. 2 in share of total industry leases for the quarter, at 13.3 percent and 13 percent, respectively. Ford Motor Credit Co. was No. 3, at 11.8 percent, Experian said.
"The list of the most commonly leased vehicles looks a lot like the list of the top-selling vehicles," Zabritski said. "The assumption is that it's all high-line, but that's not the case."
In the first quarter, the average loan amount for a new vehicle financed increased by $628, rising from $26,020 in the first quarter 2012 to $26,648 in the first quarter 2013. The average used vehicle loan increased $461 from a year ago to $17,532.
Experian Automotive also reported that consumers within all credit tiers were able to obtain financing in first quarter. Most notably, loans made to consumers with credit outside of prime (nonprime, subprime and deep subprime) jumped to 45.2 percent of the overall loan market in first quarter, up from 44.4 percent in the year-ago period.
For new vehicles, the share of loans made to below-prime car buyers jumped to 25.1 percent in first quarter from 23.2 percent in the first quarter 2012. For used vehicles, nonprime, subprime and deep-subprime loans held a 57.7 percent share of the market, up from 56.8 percent in the year-ago quarter.
The following are other trends reported by Experian Automotive:
(Sources: Automotive News and F&I Magazine, 06/11/13)
- The average credit score for a new-vehicle loan dropped to 755 in the first quarter from 760 in the year-ago quarter.
- The average credit score for a used-vehicle loan dropped to 657 from 659 in the year-ago period.
- Finance companies held a 15.5 percent share of the market, up 5.1 percent from a year ago.
- Banks held a 39.5 percent share of the market, down 1.7 percent from a year ago.
- Captive finance companies had 17.3 percent market share, up 3.4 percent from a year ago.
- Credit unions had 16.7 percent market share, up 0.4 percent from the first quarter 2012.
- Buy-here, pay-here financing held a 10.7 percent share of the market, down 6.4 percent from a year ago.
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