SCHAUMBURG, Ill. (6/7/13)--Vehicle leasing increased by 12.5% to reach the highest level since 2006, Experian Automotive reported this week.
Credit union market share also increased 0.4% from first quarter 2012 to 16.7%, Experian reported.
Leasing accounted for a record 27.5% of all new vehicles financed in the first quarter, up from 24.4% a year earlier, according to Experian's State of the Automotive Finance Market report. The average monthly payment for a new vehicle financed was $459, down from $462 for the same quarter in 2012.
"Consumers tend to shop for vehicles based within the limits of their budget, and leasing is often seen as a viable path to a lower monthly payment," said Melinda Zabritski, Experian senior director of automotive credit. "Lenders have seen overall stability come back to the market since the recession, and leasing has gradually returned as a larger part of many lender strategies."
While leasing a vehicle can help consumers achieve a lower monthly payment, the report also showed the term length increased to 65 months in the first quarter, up from 64 months in 2012, and a decrease in interest rates--4.5% in 2013, down from 4.6% in 2012--that helped to keep payments low for new vehicles financed.
In the first quarter, the average loan amount for a new vehicle financed rose by $628, to $26,648 from $26,020. The average used-vehicle loan increased $461, to $17,532 from $17,071.
The report also indicated that consumers within all credit tiers obtained financing in the first quarter. Loans going to consumers with credit outside of prime (nonprime, subprime and deep subprime) jumped to 45.2% of the overall loan market, up from 44.4%.
For new vehicles, loan share increased to 25.1%, up from 23.2%. For used vehicles, nonprime, subprime and deep-subprime loans accounted for 57.7% market share, up from 56.8% in the same period last year.
In other trends:
The average credit score for a new vehicle loan dropped to 755, down from 760;
The average credit score for a used-vehicle loan dropped to 657, down from 659;
Finance companies had 15.5% market share, up 5.1%;
Banks had 39.5% market share, down 1.7%;
Captive finance companies had 17.3% market share, up 3.4%; and
Buy here/pay here financing had 10.7% market share, down 6.4%.