Experian Automotive found in its 2009 first quarter analysis that more car shoppers are leaning toward used car loans instead of new car loans, due to a tough economy and stricter lending criteria, SubPrime Auto Finance News reports.
In the first quarter of 2009, used-vehicle loans totaled 68.13% of all auto loans, up from 64.3% in the first quarter of 2008. New-vehicle auto loans accounted for only 31.87% in the first quarter, down from 35.7% in the first quarter of 2008.
"Banks, credit unions and captive finance companies appear to have tightened their lending criteria as they look to mitigate risk," said Melinda Zabritski, director of automotive credit for Experian Automotive.
Buyers turned to used car auto loans in the first quarter of 2009, reportedly due to a tough economy and tighter lending criteria.
"Loans are still available, but lenders are changing terms. This is pushing some consumers out of the new-vehicle market and into the used-vehicle market. Some finance companies that specialize in subprime loans have seen their share increase as traditional lenders move away from riskier loans."
Experian Automotive also found that default rates on car loans 30 days past due were up 11.3% year over year while auto loans 60 days past due were up 19.5%. Currently, 2.48% of all auto loans are 30 days past due, compared with 2.22% in the first quarter of 2008. Car loans 60 days past due increased to 0.82% from 0.69%.
Experian Automotive reports that the percentage of consumers who are considered prime decreased by 2.6% and the percentage of highest-risk consumers grew by 6.03%.
Experian Automotive’s data shows that even though lenders are reportedly tightening their auto loan criteria, consumers are still able to find approvals, in the form of used vehicle car loans.