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Auto Lenders Financing More Subprime Consumers In Q1, According To Experian Automotive

Auto lenders financing more subprime consumers in Q1, according to Experian Automotive
Nonprime auto loans are up, and average scores for auto loan financing are down

Schaumburg, Ill., May 26, 2011 — Experian Automotive today announced findings from its quarterly analysis of the automotive credit industry. The latest report shows that the share of loans to credit-challenged new vehicle shoppers grew by 11.1 percent in Q1 2011 compared with Q1 2010. Share of loans to nonprime customers rose from 9.81 percent in Q1 2010 to 10.57 percent in Q1 2011. For subprime customers, share of loans jumped from 5.68 percent to 6.16 percent, while share of loans to deep-subprime customers rose from 1.38 percent to 2.00 percent.

Findings from the analysis also showed that it was easier to obtain a new vehicle loan in Q1 2011. The average credit score for a new vehicle loan in Q1 2011 was 766, compared with 776 in Q1 2010. This quarter’s score of 766 marks the lowest average score for a new vehicle loan since Q4 2008 (also 766).

“As the automotive credit market continues to stabilize, lenders are showing a higher tolerance for risk,” said Melinda Zabritski, Experian’s director of automotive credit. “Thirty-day delinquencies are at their lowest point since Q4 2008, giving lenders a little more leeway in their loan decisions. Additionally, with lower average scores for new vehicle loans and more loan activity for credit-challenged customers, it is easier to find a loan now than at any time in the past 30 months.”

Additional findings showed that the dollar amount of automotive loans that were 30- or 60-days delinquent dropped from nearly $20 billion in Q1 2010 to $16 billion in Q1 2011. Specifically, the Q1 report shows that 30-day delinquencies dropped by 7.95 percent over the previous year to 2.52 percent, while 60-day delinquencies dropped by nearly 13.45 percent to 0.68 percent.
 
In other findings:
• The average credit score for used vehicle customers in Q1 2011 was 663, down two points from 665 in Q1 2010
• The average loan amount for a new vehicle was up $8, from $25,396 in Q1 2010 to $25,404 in Q1 2011
• The average loan amount for a used vehicle jumped $397, from $16,239 in Q1 2010 to $16,636 in Q1 2011
• The average loan term has increased by a full month, jumping to 63 months for new vehicles and 58 months for used

Experian Automotive’s quarterly credit trend analysis features market reporting data and insights from Experian Automotive’s 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. For more information on Experian Automotive’s AutoCount Risk Report, visit https://www.autocount.com.

The quarterly analysis 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. To subscribe to the Experian–Oliver Wyman Market Intelligence Reports, go to http://www.marketintelligencereports.com.

Contact:  

Roslyn Whitehurst
Experian Public Relations
1 714 830 5578
roslyn.whitehurst@experian.com

About Experian Automotive
Experian Automotive is a leader in providing information services and market intelligence to manufacturers, dealers, finance, insurance and aftermarket companies, helping them increase customer loyalty; target and win new business; and make better lending, purchasing and production decisions. Experian’s AutoCheck® reports provide customers with in-depth vehicle history information to confidently understand, compare and select the right vehicle. Its North American Vehicle DatabaseSM houses more than 650 million vehicles and, when combined with Experian’s credit, consumer and business information assets, meets the industry’s growing demand for an integrated information source. Experian technology supports top automotive businesses, including eBay Motors, O’Reilly Auto Parts, Affinia, CarMax and NADAguides.com. For more information on Experian Automotive and its suite of services, visit our Website at http://www.experianautomotive.com.

About Experian
Experian® is the leading global information services company, providing data and analytical tools to clients in more than 80 countries. The company 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 31 March 2011 was $4.2 billion. Experian employs approximately 15,000 people in 41 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 http://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.