SANTA MONICA, Calif. — Along with data about how many
used-vehicle contracts written at franchised dealerships are bringing in some
negative equity, Edmunds.com shed light on term length, APR and more about
second-quarter used-vehicle sales at franchised stores.

Edmunds.com determined the average APR in the second quarter
came in at 8.2 percent, down slightly from the previous quarter when franchised
stores were finalizing financing for used vehicles at an average of 8.3
percent. A year earlier, the average stood at 7.9 percent.

According to the site's most recent Quarterly Used-Car
Market Report, the average down payment slipped 3.1 percent sequentially as the
Q2 figure settled at $2,231, down from $2,304.

A year earlier, Edmunds.com indicated used-vehicle buyers at
franchised stores were putting down $2,246.

Meanwhile, loan terms stayed flat sequentially, remaining at
64 months. In the second quarter of last year, the average was 63 months.

However, the average monthly payment ticked up slightly to
$366 in Q2. In Q1, the average was $360; and a year ago, it stood at $369.

All told, the total amount financed in Q2 was more on par
with levels Edmunds.com spotted a year earlier. The F&I office at
franchised stores wrote contracts in the second quarter where the amount
financed came in at $19,430, just 1.6 percent higher than Q2 of last year when
it was $19,121.

But the average amount financed in the first quarter was 3.2
percent lower as Edmunds.com determined that figure to be $18,820.

Edmunds.com shared more information with SubPrime Auto
Finance News beyond the Quarterly Used-Car Market Report. Analysts uncovered
the amount of used sales at franchised dealerships in June that included
negative equity.

While the June reading isn't as high as it was before the
recession, Edmunds.com found a rising trend. June's mark stood at 20.7 percent,
up from the same month a year earlier (19.5 percent) as well as the recent low
point of June 2009 (17.4 percent).

For comparison, the site mentioned how many used-vehicle contracts
originated at franchised dealership included negative equity in June of 2005,
2006, 2007 and 2008. In each instance, the level was well above 20 percent as
indicated below:

—June 2005: 24.5 percent
—June 2006: 27.0 percent
—June 2007: 27.0 percent
—June 2008: 23.8 percent

Edmunds.com director of remarketing Joe Spina offered some
clarity as to why these negative equity figures are trending higher again.

"A lot of the captives are in better position to take on
more risk," Spina said. "They have charged off so much and cleaned up their
books. Those cars that came back in 2008 and 2009, especially those SUVs when
the gas crunch hit when there was $7,000, $8,000, $10,000 (in negative equity),
those are off the books now.

"I do think with loosening credit and the ability to give
more advance of loans, there is definitely potential to take on more negative
equity," he added.

Nick Zulovich can be reached at nzulovich@subprimenews.com. Continue the conversation with SubPrime Auto Finance News on LinkedIn and Twitter.

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