F&I and Showroom, February 2019

www fi magazine com 21 F I and Showroom February 2019 PROTECTION PACKAGES Paint Sealant Leather Vinyl Preserver Fabric Carpet Protectant Undercoater Rust Inhibitor We are the leading manufacturer of car care chemicals for the new automotive aftermarket industry INNOVATIVE CAR CARE PRIVATE BRANDING OF ALL PRODUCTS ARE AVAILABLE WE CAN HELP Chem Etch Manufacturing Inc www chemetch net FIND OUT MORE 8775642565 F I and Showroom readers are among the nations best informed automotive sales and fi nance professionals To advertise in the next issue of F I and Showroom contact David Gesualdo at 7279474027 or david gesualdo@ bobit com GET CONNECTED FI05 086717 www fi magazine com CREDIT SCORES AND CREDIT UNIONS ON THE RISE The average credit scores for newand used vehicle loans continued to increase reaching 717 for new vehicles and 661 for used Average credit scores for new vehicle leases rose two points to 724 while new vehicle loans also were up 1 point to 714 Franchise used scores increased one point to 683 while the independent space rose three points to 623 The shifts in portfolio management have positively impacted credit unions while banks were the only source to see a decrease in total outstanding automotive loan balances Banks saw a decrease of approximately 1 billion in balances from a year ago reaching 369 billion Meanwhile credit union balances maintained double digit growth Other notable loan balance growth for this period includes captives up 275 and finance companies up 507 30 DAY DELINQUENCY RATES IMPROVE Overall delinquency rates continued to improve providing another sign of auto loan market stability The 30 day delinquency rate fell from 239 in Q3 2017 to 223 in Q3 2018 For 60 day delinquencies rates fell from 076 in Q3 2017 to 072 in Q3 2018 While the automotive finance market is cyclical there are many factors that can contribute to shifts in market share including consumer behavior and vehicle affordability Its important for auto finance sources to keep a close eye on these trends to make the right decisions and help car shoppers find affordable vehicles with the most appropriate terms while positively impacting their portfolios ABOUT THE AUTHOR Melinda Zabritski serves as senior director of automotive credit for Experian Automotive Email her at melinda zabritski@ bobit com 0 1 2 Deep Subprime Subprime Nonprime Prime Super Prime Deep Subprime Subprime Nonprime Prime Super Prime Deep Subprime SubprimeNonprime Prime Super Prime 508 547 383 BNHP 758 Captive 2721 0 20 40 60 80 100 856 853 Subprime Nonprime Prime Percentage of consumers by risk tier choosing used Q1 2015 690 701 520 545 Q1 2016 Q3 2017 Q3 2018 New Loan Risk Distribution 0 20 40 60 80 100 2945 4275 1674 1026 2849 4344 1733 999 Q3 2017 Q3 2018 Used Loan Risk Distribution 0 20 40 60 80 100 1299 3785 2197 2286 433 1254 3729 2205 2348 464 500 600 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Franchise Used Independent Used All Used 593 596 601 610 615 Deep Subprime Subprime Nonprime Prime Super Prime Deep Subprime Subprime Nonprime Prime Super Prime 0 20 40 60 80 856 853 Subprime Nonprime Prime Q1 2015 690 701 520 545 Q1 2016 Q3 2017 Q3 2018 0 1026 999 Q3 2017 Q3 2018 Used Loan Risk Distribution 0 20 40 60 80 100 1299 3785 2197 2286 433 1254 3729 2205 2348 464