2011 1Q State of Automotive Financing - Experian...Data Overview First quarter 2011Automotive...

State of the Automotive Finance MarketFirst Quarter 2011First Quarter 2011

Melinda Zabritski, Director of Automotive Credit

© 2011 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein may be the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified,or distributed in any form or manner without the prior written permission of Experian Information Solutions, Inc.

Session overview

Automotive market overview with aAutomotive market overview with a look at consumer delinquency

How new and used financing is changing

Questions and answers

© 2011 Experian Information Solutions, Inc. All rights reserved. 2

Data Overview

First quarter 2011Automotive Finance Market Overview

Risk TiersRisk TiersCategory Scorex

PLUSSMVantageScore

► All open automotive loans by risk tier► Automotive loan delinquencies► Source: Experian-Oliver Wyman

Market Intelligence Reports

PLUSSM

Super Prime 740+ 801 – 990

Prime 680 – 739 701 – 800

Nonprime 620 – 679 641 – 700Market Intelligence Reports

► Visit www.marketintelligencereports.com Automotive Financing in first quarter 2011

► New versus Used vehicles

Subprime 550 – 619 601 – 640

Deep Subprime <550 501 - 600

► New versus Used vehicles► Top Lender report► Loan characteristics, now including Loan-to-Value ► Source: Experian Automotive National Vehicle Database sourced from DMV title► Source: Experian Automotive National Vehicle Database sourced from DMV title

registrations and NADA Used Car Guides. Visit: www.autocount.com


Automotive market overview with a look at consumer delinquency

4© 2011 Experian Information Solutions, Inc. All rights reserved.Experian Public. 4

Automotive Finance MarketHow has the market been changing?How has the market been changing?

Risk Distribution of Open Auto Loans

Year-over-Year Change in Risk Distribution

11.8%11.8%

3.31% 3.55%2.59%

0.25%0%

5%

39.1%39.1%

15 5%15 5%

8.6%8.6%-5%

Super Prime

Prime Nonprime Subprime DeepSubprime

25 0%25 0%

15.5%15.5%-10%

Source: Experian-Oliver Wyman Market Intelligence Reports

25.0%25.0%

Super Prime Prime Nonprime Subprime Deep Subprime -17.61%-20%

-15%


Source: Experian Oliver Wyman Market Intelligence Reports

Total Automotive BalanceWho holds the open loans?Who holds the open loans?

Year-over-Year Change in Balance

Total Outstanding Automotive Balance

$13

$10

$15

Bill

ions

$64 $64 $77 $77 $600

$700

Bill

ions

$3.3B

$5

$10

$194 $194 $193 $193

$144 $144 $142 $142

$300

$400

$500

$(1)$(2)

$- Bank Captive CreditUnion

Finance/Other

$231 $231 $225 $225 $100

$200

$

Source: Experian-Oliver Wyman Market Intelligence ReportsYOY Change

$(7)

$(10)

$(5)$-

Q1 2010 Q1 2011

Bank Captive Auto Credit Union Finance/Other



Average Age of Automotive LoansAre consumers holding onto loans longer?Are consumers holding onto loans longer?

Average Loan Age by Lender Type

2 18

Average Loan Age by Risk Segment

30.82

30

31

322.18

30.22

32.49

31.44

31

32

331.22

28.12

29.42

28.6428.14

27.59 27.72 27.8928

29

30-0.25

0.30

-1.7-0.53

27 1927.72

30.22

28

29

30

-1.82-0.69

-0.76

-6.25

26.4826.78

25

26

2727.19

26.57

25.3625.88

26.96

26.24

25

26

27


24

25

All Banks Captive Auto Credit Union Finance/Other TOTAL

Q1 2010 Q1 2011

24Super Prime Prime Nonprime Subprime Deep

Subprime

Q1 2010 Q1 2011



Recent Automotive Delinquency: 30 Day DelinquencyHow are automotive loans performing?How are automotive loans performing?

6%

30 Day Delinquency- 9.75%

Total Balance of 30 Day Delinquent Loans

5.35%

4.83%5%

10 32%

Overall 22 bps improvement

$3,108 $3,108 $14,000

$16,000

$18,000

Mill

ions

-$2.3 billion

2.50%

2.98%2.74%

2.25%

2.67% 2.52%3%

4% -10.17%-10.32%

3.13%

- 7.95%

$5,345 $5,345 $1,773 $1,773

$2,009 $2,009 $3,612 $3,612

$8,000

$10,000

$12,000

1.47%

2.25%

1.42%

1%

2%

$3 960$3 960$5,348 $5,348

$4,156 $4,156

$2 000

$4,000

$6,000


0%Banks Captive Auto Credit Union Finance/Other TOTAL

Q1 2010 Q1 2011

$3,960 $3,960

$-

$2,000

Q1 2011Q1 2010




Recent Automotive Delinquency: 60 Day DelinquencyHow are automotive loans performing?How are automotive loans performing?

2.0%

60 Day Delinquency-9.76%

Total Balance of 60 Day Delinquent Loans

1.75%

1.58%

1.4%

1.6%

1.8% Overall 10 bps improvement

$960 $960 $3,500

$4,000

$4,500

Mill

ions

-$1 billion

0 73% 0.76%0 8%

1.0%

1.2%

1.4%

-17.76%-22.63%

-11 01%

-13.45%

$1,159 $1,159

$517 $517

$396$396

$1,047 $1,047

$2,000

$2,500

$3,000

0.73%0.65%

0.40%

0.76%

0.60%0.50%

0.35%

0.65%

0.4%

0.6%

0.8% -11.01%

$1,477 $1,477 $934$934

$734 $734

$396 $396

$500

$1,000

$1,500


0.0%

0.2%

Bank Captive Auto Credit Union Finance/Other TOTAL

Q1 2010 Q1 2011

$934 $934

$-

$500

Q1 2010 Q1 2011




Recent Automotive RepossessionsHow have repossessions changed?How have repossessions changed?

3.0%

Quarterly Repossession Rate-2.0%

$8 713$9,000

Average Charge-Off Amount

2.62%2.57%

2.5%$8,295

$8,713

$8,375 $8,231

$8,371

$8,000

$8,500

-$1,490 -$1,143-$1,149 -$1,312

1.5%

2.0%

-4.3%

$6,729

$7,223 $7,232$7,082 $7,059

$6 500

$7,000

$7,500 -$1,566

$ ,

0.48%0.57%

0 19%

0.71%

0.35%

0.52%

0 20%

0.68%

0.5%

1.0%-27% -9.3%

3.7%

$5,500

$6,000

$6,500

YOY ChangeSource: Experian-Oliver Wyman Market Intelligence Reports

0.19%0.20%

0.0%Bank Captive Auto Credit Union Finance/Other TOTAL

Q1 2010 Q1 2011

$5,000 Bank Captive Auto Credit Union Finance/Other TOTAL

Q1 2010 Q1 2011



Automotive financing in the first quarter 2011

11© 2011 Experian Information Solutions, Inc. All rights reserved.Experian Public. 11

Market Snapshot on Vehicle FinancingHow has financing on vehicles changed?How has financing on vehicles changed?

100%

Used Financing by Model YearFinancing by Vehicle Type

12.5%

13.4%13.4%

1.5%

70%

80%

90%NewNew37.54%37.54%

UsedUsed62 46%62 46%

12.5%

-6.2%

Used Financing by Dealer Type23.9%23.9%

12.3%12.3%

0.2%50%

60%

70%2011201020092008

62.46%62.46%

Independent32.88%

Used Financing by Dealer Type

8 2%8 2%

17.8%17.8%8.7%8.7%

7.5%7.5%3.7%3.7%2.8%2.8%

20%

30%

40% 200720062005

-3.8%

2%

Source: Experian AutomotiveYOY Change

FranchiseFranchise67.12%67.12% 6.9%6.9% 8.9%8.9%

10.2%10.2% 8.2%8.2%

0%

10%

Franchise Dealer Independent Dealer


Source: Experian Automotive

Market Snapshot on Vehicle FinancingHow has financing on vehicles changed?How has financing on vehicles changed?

-10800

Average Credit Scores100%

Financing by Risk Segment

753 755762 766

773 774 775 775 776 772 769 767 766

740

760

780

41.89%41.89%40.72%40.72%42.37%42.37%46.22%46.22%70%

80%

90%

2.9%

-2

668 670 668677

684 680 679 683 679680

700

720

40%

50%

60%

0%

653

668 670 668661 665 663

620

640

660

680

58.11%58.11%59.28%59.28%57.63%57.63%53.78%53.78%

10%

20%

30%

40%-2.0%


600

620

Q1 2008

Q2 2008

Q3 2008

Q4 2008

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

New Average Score Used Average Score

0%

10%

Q1 2011Q1 2010Q1 2009Q1 2008

Prime Subprime



Quarterly Financing for New VehiclesHow has credit changed for new financing?How has credit changed for new financing?

New Vehicle Financing by Risk Segmentation


80%

90%

100%44.8%

40%

50%

65.55%65.55%69.89%69.89%

50%

60%

70%

20%

30%-4.7%

10.57%10.57%9.81%9.81%

13.66%13.66%13.25%13.25%

10%

20%

30%

40%

8.5% 7.8%

3.1%

10%

20%

11.1%


2.00%2.00%1.38%1.38%6.16%6.16%5.68%5.68%

9.81%9.81%

0%

10%

Q1 2011Q1 2010

Deep Subprime Subprime Nonprime Prime Super Prime -6.2%-10%

0% Super Prime

PrimeNonprimeSubprimeDeepSubprime



Quarterly Financing for Used VehiclesHow has credit changed for used financing?How has credit changed for used financing?

Used Vehicle Financing by Risk Segmentation


32.97%32.97%35.12%35.12% 80%

90%

100%

-4%

13.8%

8.8%10%

15%

14.35%14.35%13.19%13.19%

12.47%12.47%12.21%12.21%

%

50%

60%

70%

2.1%

5%

22 81%22 81%24.19%24.19%

17.41%17.41%15.29%15.29%

10%

20%

30%

40%3.60%

0%Super Prime

PrimeNonprimeSubprimeDeepSubprime


22.81%22.81%9%9%

0%

10%

Q1 2011Q1 2010

Deep Subprime Subprime Nonprime Prime Super Prime

-5.7% -6.1%

-10%

-5%



Automotive Finance by Lender TypeWhat lenders are gaining share?What lenders are gaining share?

37 41% 16.7% 20%40%

Market Share by Lender35.6%

29.6% 40%50%

New Financing

37.41%

14.4%

5.6%

13.7%

%

5%

10%

15%

30%

35%44.90%44.90%

0 43%

39.45%39.45%

8 85%8 85% 0 80%

2.7%

-23.9%

-8.7%

20.8%

-20%

-10%

0%

10%

20%

30%

10%

20%

30%

40%

13.10%

18.85%

15.28%-5%

0%

5%

15%

20%

25%0.43% 8.85%8.85% 5.57%5.57% 0.80%

-30%0%Bank BHPH Captive Credit Union Finance Other

Market Share Change in Share

Used Financing8.67%

6.69%

-21.2%

-13.3%

-20%

-15%

-10%

5%

10%

2.4%9.5%

-12.7%

11.9%20.5%

0%

10%

20%

30%

15%

20%

25%

30%

35%

Used Financing


-25%0%Bank BHPH Captive Credit

UnionFinance Other


33.26%33.26% 20.13%20.13% 7.43%7.43% 18.84%18.84% 10.39%10.39% 9.95%9.95%-25.6%

-30%

-20%

-10%

0%

5%

10%

Bank BHPH Captive Credit Union Finance Other




Risk Distribution by Lender TypeHow have the lenders shifted?

100%

Lender Type by Risk Distribution

How have the lenders shifted?

18%

Change in Outside of Prime

13.62%13.62%

4.69%4.69%

56.97%56.97%63 14%63 14%

49.13%49.13%

11.01%11.01%

70%

80%

90%16.50%

14%

16%

40.70%40.70%

18.26%18.26%

63.14%63.14%

40%

50%

60%

6 54%8%

10%

12%

29.98%29.98%10 26%10 26% 10 84%10 84%

13.58%13.58%12.87%12.87%

17.56%17.56%

14.99%14.99%14.96%14.96%

10%

20%

30%

40%

3.75%

6.54%

2%

4%

6%

4.21%4.21% 1.72%1.72% 4.21%4.21%

10.26%10.26%7.30%7.30%

10.84%10.84%

0%

10%

Bank Captive Credit Union Finance

Deep Subprime Subprime Nonprime Prime Super Prime -0.33%-2%

0%

2%

Bank Captive Credit Union Finance


Top 20 Lenders by Market ShareWho gained or lost share?Who gained or lost share?

85 5% 87 3% 100%10%

Top 20 Lenders: Total Loan85.5%

68.6%

28.8%

52.1%

87.3%

40%

60%

80%

6%

7%

8%

9% 51.18% of All 51.18% of All FinancingFinancing

13.1%

1.0%

37 5%

13.8%

-5.6%

7.8% 8.1%

21.8%

4.6%

-14.7%

13.5%

-4.7%0.8% 4.7% 4.1%

12.9%

-20%

0%

20%

2%

3%

4%

5%

6%

9.44%9.44% 6.07%6.07% 5.23%5.23% 4.27%4.27% 3.80%3.80% 3.44%3.44% 2.80%2.80% 1.91%1.91% 1.80%1.80% 1.57%1.57% 1.56%1.56% 1.28%1.28% 1.23%1.23% 1.18%1.18% 1.08%1.08% 1.02%1.02% 0.92%0.92% 0.91%0.91% 0.84%0.84% 0.83%0.83%

-37.5%

-60%

-40%

0%

1%

2%


Q1 2011 Share Year-over-Year Change in Share



Top 20 New Lenders by Market ShareWho gained or lost share on New Vehicle Financing?Who gained or lost share on New Vehicle Financing?

123 2% 140%16%

Top 20 New Lenders by Market Share

77.3% of New 77.3% of New FinancingFinancing

65.4%75.1%

123.2%

60%

80%

100%

120%

10%

12%

14%

24.1%

0.7% -1.5%

14.9%

-3.6%

14.4% 11.1%

-6.9%

21.0%

-2.8% -5.8%0%

20%

40%

60%

4%

6%

8%

14.49% 9.43% 8.71% 8.14% 6.02% 4.44% 4.06% 3.18% 2.98% 2.39% 1.91% 1.69% 1.67% 1.44% 1.34% 1.27% 1.22% 1.09% 0.98% 0.90%

-13.4% -12.9%

-48.5%

-14.8% -11.0% -12.3%

-60%

-40%

-20%

0%

2%

4%





Top 20 Used Lenders by Market ShareWho gained or lost share on Used Vehicle Financing?Who gained or lost share on Used Vehicle Financing?

100%8%

Top 20 Used Auto Lenders by Market Share85.1%

68.6%60.2% 60.1%

41.8% 41.0%

60%

80%

5%

6%

7% 38.7% of Used 38.7% of Used FinancingFinancing

15.7% 12.6% 12.9%

25.0% 21.5%

-3.8%

12.2%

-0.7%

20.2%

19 8%

8.8%3.9%

0%

20%

40%

2%

3%

4%

7.18%7.18% 3.85%3.85% 3.30%3.30% 3.03%3.03% 2.91%2.91% 2.68%2.68% 2.09%2.09% 1.58%1.58% 1.38%1.38% 1.32%1.32% 1.31%1.31% 1.11%1.11% 0.99%0.99% 0.97%0.97% 0.94%0.94% 0.93%0.93% 0.88%0.88% 0.83%0.83% 0.75%0.75% 0.67%0.67%

-28.4%-22.6% -19.8%

-40%

-20%

0%

1%





Vehicle FinancingHow has financing changed?How has financing changed?

$30,000

Average Amount Financed$8

$23 924$25,754 $26,738 $25,257$24 120

$26,137 $26,841$25,216

$30,000

Average Amount Financed: New Vehicles

$25,396 $25,404

$20 000

$25,000

$397

$21,900$23,924

$21,860$24,120

$5,000

$10,000

$15,000

$20,000

$25,000

$16,239 $16,636

$15,000

$20,000$


Q1 2010 Q1 2011

Average Amount Financed: Used Vehicles

$5,000

$10,000

$11,949$13,924

$15,516$16,974 $17,925

$12,830$14,823

$16,133$17,524 $18,294

$10,000

$15,000

$20,000

Average Amount Financed: Used Vehicles


$New Used

Q1 2010 Q1 2011

$

$5,000


Q1 2010 Q1 2011



Vehicle Values and Loan-to-ValueHow do the lenders and risk segments compare?How do the lenders and risk segments compare?

Average Loan-to-Value by Risk Segment

Average Loan-to-Value by Lender Type

139.72%

134.41%132.25%

129 54%

140%

150%

138.24%140%

150%

118.82%121.61% 121.53%

116 9%

129.54%

118.05%120%

130%

111 79%

118.79%122.30% 121.91%

129.69%126.35%

120%

130%

116.59%

100.73%100%

110%

103.16%

108.85%111.79%

107.17%

100%

110%

Source: Experian Automotive and NADA Used Car Guides

90%Deep

SubprimeSubprime Nonprime Prime Super Prime

Average New LTV Average Used LTV

90%Bank Captive Credit Union Finance Market

Totals

Average New LTV Average Used LTV



Vehicle PaymentsHow have monthly payments changed?How have monthly payments changed?

$500

Average Monthly Payment$-2 $500

Average Monthly Payment: New Vehicles

$462 $460

$450

$452$461 $462 $466 $463

$450$458 $459 $460 $461

$420

$440

$460

$480

$341 $343$350

$400$2

$400Deep Subprime Subprime Nonprime Prime Super Prime

Q1 2010 Q1 2011

Average Monthly Payment Used Vehicles

$300$347 $343

$331 $334$346$351 $350

$333 $335$345

$340

$360

$380

$400

Average Monthly Payment Used Vehicles


$250New Used

Q1 2010 Q1 2011

$300

$320


Q1 2010 Q1 2011



Vehicle Loan TermsHow have terms changed?How have terms changed?

72

Average Term67.93 68.26 67 49

69.29 69.02 67.90 66 4472

Average Term: New Vehicles

63

1

67.93 67.49 66.27

61.00

67.90 66.44

60.8060

62

57

63

5860

1 48Deep Subprime Subprime Nonprime Prime Super Prime

Q1 2010 Q1 2011

Average Term: Used Vehicles

47.89

55.9259.14 60.63 59.47

51.23

57.90 59.82 61.02 59.5660

72

Average Term: Used Vehicles


48New Used

Q1 2010 Q1 2011

36

48


Q1 2010 Q1 2011



Vehicle Loan RateHow have rates changed?How have rates changed?

9.51%10%

Average Rate -43 bps

13.41%13.57%14%16%

Average Rate: New Vehicles

9.08%

7%

8%

9%

-48 bps

10.80%

7.57%5.74%

4.38%

10.38%

6.76%4.95%

3.64%

2%4%6%8%

10%12%14%

5.31%4.83%

4%

5%

6%0%


Q1 2010 Q1 2011

Average Rate: Used Vehicles

1%

2%

3% 18.12%15.31%

10.82%8.04%

6.01%

17.85%

14.64%

9.88%7.04%

5 06%10%

15%

20%

e age ate Used e c es


0%New Used

Q1 2010 Q1 2011

5.06%

0%

5%


Q1 2010 Q1 2011



Average Rates by LTVHow do rates and scores vary by LTV?How do rates and scores vary by LTV?

Average Rates by LTV

7 49%7.89%

8.18%8.57%

8.98%9.41% 9.67% 9.75% 9.75% 9.64% 9.63% 9.47%

9.10%

8%

10%

12%

4 62% 4 78% 4.96% 5.07% 5.24% 5.42% 5.55% 5.63% 5.70% 5.72% 5.54% 5.48% 5.51% 5.28%

6.26% 6.02% 6.01% 6.23% 6.45%6.81%

7.21% 7.49%

4%

6%

8%

311bps

404bps 410bps

4.44%3.99% 3.96% 4.00% 4.14% 4.39% 4.62% 4.78%

0%

2%

4%


0%

NEW USED



In Summary

Overall, open portfolios are still strong with a slight increase ($3 billion/0.5%) over last year( ) y

Strong improvement in both 30 and 60 day delinquencies

Credit continues to loosen on originations

► All of Subprime is up 11.1% on New; 3.6% on Used

► Average scores continue to decrease

Sli ht hift i U d fi t d ld d l hi l► Slight shift in Used finance toward older model vehicles

Financing and payments relatively flat to last year

► Terms increasing among highest risk segments► Terms increasing among highest risk segments

► Rates decreasing for both new and used


Mark your calendars

Q2 2011Q2 2011 Automotive Credit

Trends BriefingTrends Briefing

August 30, 2011August 30, 2011


2011 1Q State of Automotive Financing - Experian...Data Overview First quarter 2011Automotive...

Documents

Transcript of 2011 1Q State of Automotive Financing - Experian...Data Overview First quarter 2011Automotive...