It goes without saying that the first quarter of 2020 has been tumultuous across the board. While it can be difficult to keep up, having a solid pulse on the auto finance market can help increase your financial institution’s auto loan portfolio. Experianrecently released their State of the Automotive Finance Market report from Q1 of 2020. I’d like to share some highlights of the report with you and offer insight for your financial institution on the state of the auto finance market going forward into the second quarter of this most unusual year.
Delinquency Trends Remain Stable
While auto loans can offer profitability for a financial institution, there are also some downfalls and risk when it comes to the lending industry. In recent years, the auto-loan industry has seen a rise in delinquencies. And, of course, this is never a good thing for financial institutions.
The rise in auto loan delinquencies remained relatively flat during the first quarter of 2020. We saw 30 day delinquencies fall very slightly from 1.73% in the first quarter of 2019 to 1.68% this year. 60 day delinquencies remained stable, barely shifting from 0.67% in 2019 to 0.66% in Q1 of 2020.
Record High Loan Amounts and Monthly Payments
Average loan amounts and monthly payments reached record highs this quarter. Average new lease payments reached $466 per month with an average 36.76-month lease term in Q1. Total loan amounts vary by risk tier; however, average loan amounts were $33,739 and $20,723 for new and used auto loans, respectively.
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