Credit unions and captives have gained marketshare amid pullback from banks, according to Experian’s third-quarter Automotive Finance Report.
Banks in the auto lending space control 32.9% of total financing, down from a 35.1% marketshare during the same period the year prior, according to the report. Meanwhile, captives managed to grow their share of total financing by 150 basis points and credit unions added 140 basis points to their share of the market.
This shift in marketshare is all happening during a time when the pot has never been bigger. Total automotive balances fit $1.1 trillion in the third quarter, up 6.2% compared with the same period the year prior.
Independent finance companies also experienced a decline in marketshare, but it was a more muted 50-basis-point decline.
Additionally, delinquencies across the industry continue to climb even as average Fico scores rise. The average Fico score for new-vehicle loans rose to 716, compared with 714 during the same period the year prior. Likewise, the average used-vehicle Fico score is 659, up from 655 the year prior.
This has, in part, led to the increase in delinquencies to “taper off,” Experian said in the report, yet the number of delinquent consumers continues to rise. Total loans and leases 30 days past due as a percentage of balanced only had a one-basis-point rise as independent finance companies and credit unions actually lowered their rate. Yet, rising delinquencies from banks and captives outweighed those effects.
Delinquencies 60 days or more past due had a more pronounced impact rising to 0.76% of total loan and lease balances, up from 0.74% during the prior-year period.
Finally, loan terms also continue their ascension to an average of 69 months for a new vehicle — six-tenths of a year higher than 3Q16. Similarly, used-vehicle loan terms rose to 63.9 months.
