Nonprime Auto Approvals, Leasing Up in March
April 26, 2011
April 26, 2011
By Jeff Martin, President of Autoland Solutions
The economy and world events continue to shape the lending environment as well as the automotive market. Here are some of the trends, challenges, and opportunities affecting you and your members.
In reading CNW research for March, some interesting lending tidbits:
- Nonprime approvals were up 28 percent in March compared to the same period last year;
- 12 percent of nonprime applications are now receiving loan approvals;
- The average FICO score fell to 688 for new car buyers and 615 for used car buyers, continuing a steady decline going back to January of last year; and
- New car leasing is increasing, with the captive lenders benefiting the most. However, the outlook for used car leasing is poor.
News from the automotive sector:
- The supply of used cars is steadily decreasing, as consumers continue to hold on to cars longer;
- On the plus side, the overall number of used cars sold through the online channel has continued to increase so far this year;
- Japan’s earthquake will disrupt supply chains and boost the prices of Japanese cars. Autoland is already seeing prices rise for the Prius and other units made in Japan; and
- Scarcity of components made in Japan may also disrupt domestic car production.
Observations from Autoland:
- March was a very strong used car month. Pre-owned vehicles made up 38 percent of the cars delivered;
- We began to see some reductions of trade-in value for large trucks and SUVs. This shift is to be expected, given rising gas prices. However, overall vehicle trade-in values are heating up and rising almost daily;
- Lending continues to be very competitive for credit unions in the prime and super prime segments. We have also seen a minor increase in nonprime lending as credit unions cautiously re-enter this credit segment; and
- Pricing on fuel-efficient vehicles is beginning to tick up due to gas prices and limited availability.
Autoland will continue our efforts on behalf of you, and by extension, your members to provide excellent value when purchasing a vehicle. We also provide great value on trade-ins, especially “clean” trades. Finally, on the lending front, it’s simple: if the member qualifies for your loan, we will do everything in our power to make sure you get the loan.
Posted in Advocacy News.