Experian Automotive Talks to 'Auto Trends' About the State of Car Financing

Melinda Zabritski, who is the head of automotive financial insights for Experian Automotive, talks car payments and more. (Photo Credit: EA)

Over the past two years, the Federal Reserve has raised interest rates have 11 times. 

Melinda Zabrintski, who is the head of automotive financial insights for Experian Automotive, joins Auto Trends with JeffCars.com, the only multicultural syndicated automotive program in North America, to talk about the effect the rates have had on consumers financing and leasing new and used vehicles. 

Experian Automotive is a division of Experian credit, one of the leading credit bureaus in the U.S.

Moreover, Zabrintski touches on where consumers are getting their financing from.

Airing Today On SiriusXM's 'Auto Trends' Part-One Of A Two-Part Series On Credit And Car-Buying With Experian Credit

Over the next two weeks, we have credit and finance experts from Experian, one of the three major credit reporting agencies, who will be joining us to talk one-on-one about everything you ever wanted to know about credit. We dispel all of the myths.

This week's show will appeal to young adults looking to establish credit to more seasoned adults who have faced bankruptcies and divorces to those with thin credit files looking to get back on track. 

From now until Monday, November 26, you can access the SiriusXM app to hear the show for free.  

New shows air every Friday. Encore broadcasts can be heard every Sunday and Monday. 

Experian Automotive Joins "Auto Trends with JeffCars.com" To Talk About The Latest Finance Trends

Melinda Zabritski, a senior director for Experian Automotive’s, which is a division of Experian credit, serves as the primary analyst and spokesperson regarding key automotive finance trends.

Prior to joining Experian in 2004, Zabritski held various product management and analyst positions in the credit industry, where she managed and developed credit risk models and market trending and forecasting tools. During that time, she also was responsible for managing prescreen and account management product lines.

Experian's Latest 2016 Car Financing And Credit Score Trend Study

Prime and subprime customers

Findings from the second quarter 2016 Automotive Finance Report reveals that while both 30- and 60-day loan delinquencies were up slightly, the combined subprime and deep-subprime share of new and used auto loans and leases dropped from 23.3 percent in the second quarter 2015 to 22.8 percent in second quarter 2016. Overall, automotive lenders made more than five times as many loans to super-prime customers (17.9 percent of total auto loans and leases) as to deep-subprime customers (3.5 percent of total auto loans and leases).

Auto Sales On A Boom : 17 Million Registered And How Consumer Car Buying Habits Have Shifted In 9 Years

Experian Automotive announced earlier this month that new vehicle registration volumes for light-duty vehicles reached the highest point in the past nine years. During the rolling year from Nov. 1, 2014, through Oct. 31, 2015, there were more than 17 million new vehicles registered within the United States — a metric that hasn’t been achieved since 2006.
 

The highest number of new registration volumes on record was 17.4 million in 2006, and the lowest point was during the Great Recession, when volumes hit 10.2 million in 2009.

 

Latest Auto Trends: Driving Facts About Car Loans, Leases And Credit

Auto Loan Analysis: Comparing the second quarter of 2013 to the second quarter of 2014

For those in the market to purchase a vehicle and have plans on either financing or leasing a vehicle, check out these stats.

1. The percentage of subprime and deep subprime new car loans being approved by lenders decreased by 7 percent over the last year. During the second quarter of  2013, 22 percent of loans were approved as opposed to 15 percent for the same period in 2014. Subprime credit are those with credit scores below 650, where as deep subprime are those with credit scores in the 500 range or lower.
2. The percentage of used car loans to subprime and deep subprime loans also dipped from 50.6 percent in 2013 to 40.2 percent this year.
3. The average new vehicle loan extended to subprime consumers dropped from $27,563 during the second quarter of 2013 to $27,347 during the same period in 2014. 
4. For used cars, the average deep subprime loan was $15,113 in the second quarter of 2013, as opposed to $14,358, during the same period in 2014.
5. Leases, which are typically extended to those with high credit scores, accounted for 25.6 percent of new car sales during the second quarter of this year, up from 23.4 during the second quarter of 2013.

Besides Design, Technology And Price Wars, Long-Term Loans Driving Sales

There are just a few ways consumers are pushed into new car showrooms. Its 

due to a new design, price wars, consumers seeking the latest tech features 

or the need to replace an aging vehicle. However, Experian Automotive says 

cheap payments are driving loans due to 1 in 4 customers in the first quarter

stretching new-car loans from 60 to 72 months up to 73 to 84 months, up 27.6 

2014 Experian Study: Credit Scores Tend To Drive What Consumers Buy

Lexus RX350 owners tend to have an average credit score of 775.

Top 5 Models	Average Vantage (Credit)Score
Lexus	RX350	775
Acura	RDX	765
Subaru	Outback	762
Acura	MDX	761
Subaru	Forester	755
Bottom 5 Models
Nissan	Versa	657
Kia	Rio	656
Chrysler	200	651
Kia	Forte	650
Dodge	Avenger	619

Its no secret that for those financing a vehicle, one's credit score tends to determine what consumers drive and buy. A recently released study from Experian, the Atlanta-based credit reporting agency, revealed there is a direct correlation between the average credit scores and the vehicles consumers buy. Consumers with highest on average credit scores top five new-vehicle purchases in 2013 were the Lexus RX350, the Acura RDX, the Subaru Outback, the Acura MDX and the Subaru Forester. In most cases, this should also equate to lower interest rates, too, which in term means lower monthly payments.