SCHAUMBURG, Ill. — As a record number of new-vehicle buyers
used either a loan or a lease to fund the deal, Experian Automotive indicated
the number of subprime contracts kept rising during the second quarter.

According to the latest State of the Automotive Finance
Market report, nonprime, subprime and deep subprime new-vehicle loans increased
to 27.45 percent market share in Q2, up from 25.41 percent in the same quarter
last year.

For used vehicles, analysts indicated nonprime, subprime and
deep subprime loans accounted for 57.31 percent market share in Q2, up from 56.46
percent a year ago.

All told, Experian determined a record 84.5 percent of
consumers needed financing to acquire a new vehicle in the second quarter. New-vehicle
financing is at the highest level since tracking began in 2006.

Experian pointed out this metric is up from 82.5 percent in
Q2 of last year and from 79.7 percent prior to the recession in Q2 of 2008.

"Loans have become more accessible in recent years, and
we've seen a steady growth in the percentage of consumers financing their
vehicles," said Melinda Zabritski, senior director of automotive credit for
Experian Automotive.

"Obviously, this is good news for the auto industry, but
it's also good for consumers because this, combined with the reduction we have
seen in delinquencies, shows that they are feeling more confident in their
ability to take on more debt and pay it off in a timely manner," Zabritski
continued.

Findings from the report showed that of all new vehicles
financed, leases accounted for an all-time high of 27.64 percent during the
second quarter, up from 24.4 percent in Q2 of 2012.

Additionally, the report highlighted the differences in
financing attributes, such as average monthly payment, credit score and
financing term. For example, the average monthly lease payment was $408,
compared with $457 on a new vehicle loan.

In other second-quarter findings:

—The average amount
financed was $26,526 for a new vehicle and $17,913 for used

—The average interest rate was 4.46 percent on a new vehicle
loan and 8.56 percent for used

—The average loan term was 65 months for a new vehicle and
61 months for used

—The average monthly payment was $457 on a new vehicle and
$351 for used

Zabritski will be one of a host of executives and industry
experts who will be participating in the inaugural SubPrime Forum, the newest
addition to Used Car Week.

The SubPrime Forum, which is being orchestrated in
conjunction with the NAF Association, is set for Nov. 12 and 13 at the
Manchester Grand Hyatt in San Diego.

More details are available at www.usedcarweek.biz.

Continue the conversation with SubPrime Auto Finance News on LinkedIn and Twitter.


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