© experian information solutions, inc. 2007. all rights reserved

© Experian Information Solutions, Inc. 2007. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein may be the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified,or distributed in any form or manner without the prior written permission of Experian Information Solutions, Inc.Confidential and proprietary.

Automotive Finance Industry Trends

Melinda Zabritski

Director, Automotive Credit

© Experian Information Solutions, Inc. 2007. All rights reserved.Confidential and proprietary. 2

Concerns in Auto Finance

- Overall, the studies discovered that consumers appear to be struggling more than ever with their finances, with one

survey even finding that one in four Americans missed making one or more bill payments on time last year… (Sub-prime Auto Finance News)

— Consumers will owe more on their car loans than the actual value of the car at an increasing level. According to Edmunds.com, 25.6 percent of customers who traded in used vehicles in 2007 for a new one had negative equity in the transaction. (Auto Remarketing)

… “The delinquency rate (30 day) on ‘indirect’ auto loans arranged through dealerships jumped in the third quarter to 2.86 percent, a 16-year high.…” – American Bankers Association


Automotive Trends: Data Sources

Quarterly 5% random national sample of consumer credit files

Overall trends looks at all open automotive loans as a quarterly snapshot and extrapolates

65.9MM loans with $818 billion (3Q07)

Originations trend looks at only those loans opened within the quarter 5.1 MM loans with $94 billion (3Q07)

AutoCount Risk Report Loans only – no leases Vehicle sales with automotive financing

Sourced from state title registrations


2007 Loan Originations

Captive Bank Credit Union Finance

0.20% increase in loan originations

0.20% increase in loan originations

-2.39% decrease in amount financed-2.39% decrease in amount financed

Source: Experian, 1Q2007 – 3Q2007


Changing credit quality in loan originations

Source: Experian, 1Q2007 – 3Q2007

25% increase in highest risk category25% increase in highest risk category


Rolling Quarters: Loan Originations

Source: Experian

35.5% increase in Below Subprime Market Share35.5% increase in Below Subprime Market Share


Portfolio Snapshot

More consumers are slipping into the higher risk categories: they’re coming on prime – but not staying there

More consumers are slipping into the higher risk categories: they’re coming on prime – but not staying there

Source: Experian


Recent Delinquency: Currently 60 DPD

Source: Experian

18% increase in current delinquency

18% increase in current delinquency


Where are we on term?

Source: Experian


When is Attrition Occurring


2007 Attrition by Term

Half of all 60 MO Term loans attrite by months 34/35

Half of all 60 MO Term loans attrite by months 34/35

8.67% of all 60 MO Term loans attrite by month 68.67% of all 60 MO Term loans attrite by month 6


What are consumer purchasing

Source: Experian Automotive, November 2007

1.6% increase in used vehicle market share over October 2007

1.6% increase in used vehicle market share over October 2007


New v Used Vehicle Sales



Sales by Score Distribution


27.47% of NEW vehicle loans score below 68027.47% of NEW vehicle loans score below 680

56.02% of USED vehicle loans score

below 680

56.02% of USED vehicle loans score

below 680


Captives v Non-Captive finance


Over 52% of November 2007 financed vehiclesOver 52% of November 2007 financed vehicles


In conclusion

Over -2% decrease in outstandings despite a slight increase in originations Continued growth in both lowest and highest risk tiers Loan quality appears to be shifting away from prime after originations Increased occurrences of 60 day delinquency – excluding finance companies Decreases in loan term from peak of 3Q2006 Attrition continues to plague lenders: new purchase and refinance Growth in used vehicle financing with shifting credit quality between captives

and non-captives

© Experian Information Solutions, Inc. 2007. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein may be the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified,or distributed in any form or manner without the prior written permission of Experian Information Solutions, Inc.Confidential and proprietary.

Automotive Finance Industry Trends

Contact: [email protected]

© experian information solutions, inc. 2007. all rights reserved

Documents

experian automotive

loan originations source

automotive credit

automotive trends

open automotive loans

used vehicle loans

new vehicle loans

vehicle sales source