state of the automotive finance market third quarter … experian automotive national vehicle...

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State of the Automotive Finance MarketThird Quarter 2010

Melinda Zabritski, Director of Automotive Credit

© 2010 Experian Information Solutions, Inc. All rights reserved. 2

Data Overview

Third quarter 2010 Automotive Finance Market Overview

► All open automotive loans by risk tier► Automotive loan delinquencies► Source: Experian-Oliver Wyman

Market Intelligence Reports► Visit www.marketintelligencereports.com

Automotive Financing in third quarter 2010► New versus Used vehicles► Top Lender report► Loan characteristics, now including Loan-to-Value ► Source: Experian Automotive National Vehicle Database sourced from DMV title

registrations and NADA Used Car Guides. Visit: www.autocount.com

Risk TiersCategory Scorex

PLUSSMVantageScore

Super Prime 740+ 801 – 990

Prime 680 – 739 701 – 800

Nonprime 620 – 679 641 – 700

Subprime 550 – 619 601 – 640

Deep Subprime <550 501 - 600

http://www.marketintelligencereports.com/

http://www.autocount.com/


Session overview

Questions and answers

How new and used financing is changing

Automotive market overview with a look at consumer delinquency

4

Automotive market overview with a look at consumer delinquency

© 2010 Experian Information Solutions, Inc. All rights reserved.Experian Public. 4


Automotive Finance Market

38.2%

24.6%

15.5%

8.8%

12.9%

Risk Distribution of Open Automotive Loans

Super Prime Prime Nonprime Subprime Deep Subprime

3.12% 3.05%

1.67%

0.02%

-14.27%-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

Change in Risk Distribution from Q3 2009

How has the market been changing?

Source: Experian-Oliver Wyman Market Intelligence Reports

Super Prime

Prime Nonprime Subprime DeepSubprime


Total Automotive Balance

$225 $240

$190 $203

$144 $150

$73 $77

$-

$100

$200

$300

$400

$500

$600

$700

$800

Q3 2010Q3 2009

Bill

ions

Total Outstanding Automotive Balance

Bank Captive Auto Credit Union Finance/Other $(15)

$(13)

$(6)

$(4)

$(16)

$(14)

$(12)

$(10)

$(8)

$(6)

$(4)

$(2)

$-

Bill

ions

Change in Balance from 3Q2009

Who holds the open loans?

Source: Experian-Oliver Wyman Market Intelligence ReportsYOY Change

Bank Captive CreditUnion

Finance/Other

-$38B


Average Age of Automotive Loans

27.00

28.66

25.25

27.03 27.0427.41

29.05

26.44

30.82

28.06

12

18

24

30

36

All Banks Captive Auto Credit Union Finance/Other TOTAL

Average Loan Age by Lender Type(Months)

Q3 2009 Q3 2010

26.8725.58 26.08

28.2530.05

26.63 26.4927.86

30.74

33.71

12

18

24

30

36


Average Loan Age by Risk Segment(Months)

Q3 2009 Q3 2010

Are consumers holding onto loans longer?


-0.23 0.921.78

2.49

3.66

1.02

3.79

1.19

0.390.41


Recent Automotive Delinquency: 30 Day Delinquency

3.04%3.42%

1.68%

6.49%

3.27%

2.59%

3.16%

1.64%

6.21%

2.99%

0%

1%

2%

3%

4%

5%

6%

7%

Banks Captive Auto Credit Union Finance/Other TOTAL

30 Day Delinquency

Q3 2009 Q3 2010

$4,935 $7,114

$5,266

$6,788 $2,233

$2,438 $4,649

$5,272

$-

$5,000

$10,000

$15,000

$20,000

$25,000

Q3 2010Q3 2009

Mill

ions

Total Balance of 30 Day Delinquent Loans

Bank Captive Auto Credit Union Finance/Other

How are automotive loans performing?


-14.84%-7.68%

-2.24%

-4.33%

-8.43%

-$4.5 billion


Recent Automotive Delinquency: 60 Day Delinquency

0.87%0.74%

0.48%

2.30%

0.93%

0.67%0.59%

0.40%

2.02%

0.77%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

Bank Captive Auto Credit Union Finance/Other TOTAL

60 Day Delinquency

Q3 2009 Q3 2010

$1,199 $2,032

$965

$1,504 $509

$678 $1,402

$1,790

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Q3 2010Q3 2009

Mill

ions

Total Balance of 60 Day Delinquent Loans

Bank Captive Auto Credit Union Finance/Other

How are automotive loans performing?


-22.74%-19.99%

-16.31%

-12.20%

-17.39%

-$1.9 billion


Outside of Prime: 60 Day Delinquency Rate Which states lead in 60 day delinquency?

Source: Experian-Oliver Wyman Market Intelligence Reports

AK = 0.80%HI = 1.76%


Recent Automotive Repossessions

0.48%0.61%

0.18%

2.44%

0.70%

0.36%0.54%

0.19%

2.57%

0.67%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%


Reposession Rates

Q3 2009 Q3 2010

$9,228 $8,802

$8,202

$10,982

$9,892

$7,731 $7,554$7,740 $7,619 $7,640

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

$11,000

$12,000


Average Charge-Off Amount

Q3 2009 Q3 2010

How have repossessions changed?

YOY ChangeSource: Experian-Oliver Wyman Market Intelligence Reports

-24.9% -11.1%

1.9%

5.6%

-5.0%

-$1,497-$1,248

-$463 -$3,363 -$2,252

12

Automotive financing in the third quarter 2010

© 2010 Experian Information Solutions, Inc. All rights reserved.Experian Public. 12


-1

Market Snapshot on Vehicle FinancingHow has financing on vehicles changed?

Source: Experian Automotive

New39.05%

Used60.95%

Financing by Vehicle Type

-4.1%

YOY Change

-8.7%

6.5%

66.01% 63.58% 59.28% 62.76% 63.29%

33.99% 36.42% 40.72% 37.24% 36.71%

0%10%20%30%40%50%60%70%80%90%

100%

3Q2009 4Q2009 1Q2010 2Q2010 3Q2010

Financing by Risk Segment

Prime Subprime

8.0%

762 766 773 774 775 775 776 772 769

670 668 661677 684 680 665 679 683

600

650

700

750

800

3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010

Average Credit Scores

Average New Score Average Used Score

-6


Quarterly Financing for New Vehicles

69.88% 69.86% 69.89% 68.24% 67.14%

13.21% 13.35% 13.25% 13.55% 13.80%

9.79% 9.75% 9.81% 10.57% 10.86%

5.66% 5.60% 5.68% 6.16% 6.61%

1.46% 1.44% 1.38% 1.48% 1.59%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

3Q2009 4Q2009 1Q2010 2Q2010 3Q2010

New Vehicle Financing


8.7%

16.9%

10.9%

4.5%

-3.9%-5%

0%

5%

10%

15%

20%

Change in Risk Distribution from 3Q2009

How has credit changed for new financing?


-2.6%

12.7%

YOY Change

Super Prime

PrimeNonprimeSubprimeDeepSubprime


Quarterly Financing for Used Vehicles

39.89% 38.82% 35.12% 37.75% 38.33%

13.35% 13.27%12.21%

13.32% 13.65%

13.92% 13.86%13.19%

14.45% 14.79%

14.20% 14.66%15.29%

15.62% 15.61%

18.64% 19.40%24.19%

18.86% 17.62%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

3Q2009 4Q2009 1Q2010 2Q2010 3Q2010

Used Vehicle Financing


-5.5%

10.0%

6.2%

2.2%

-3.9%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

Change in Risk Distribution from Q3 2009

How has credit changed for used financing?


2.69%

-2.36%

YOY Change

Super Prime

PrimeNonprimeSubprimeDeepSubprime


Automotive Finance by Lender TypeWhat lenders are gaining share?


33.43%

0.34%

50.50%

9.96%5.26%

0.52%

-2.8%-9.2%

16.2%

-41.4%

30.7%

-30.1%

-50%-40%-30%-20%-10%0%10%20%30%40%

0%

10%

20%

30%

40%

50%

60%

Bank BHPH Captive Credit Union Finance Other

New Financing

Market Share Change in Share

35.05%

12.91%10.95%

24.21%

10.16%6.73%

8.1%

-10.7%

6.8%

-11.7%

27.4%

-9.9%-15%-10%-5%0%5%10%15%20%25%30%

0%5%

10%15%20%25%30%35%40%

Bank BHPH Captive Credit Union Finance Other

Used Financing


34.41%

8.00%

26.39%

18.64%

8.24%

4.30%

3.5%

-5.4%

8.1%

-18.9%

31.1%

-6.5%

-30%

-20%

-10%

0%

10%

20%

30%

40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Bank BHPH Captive Credit Union

Finance Other

Market Share by Lender



Top 20 Lenders by Market ShareWho gained or lost share?

5.79%5.47% 5.40%

5.10%

4.20%

3.37%

2.67%

2.04% 1.92%1.66% 1.58% 1.56%

1.28% 1.25% 1.17% 1.14% 1.12% 1.08% 1.00% 0.92%-19.2% -12.6%8.7% 9.9%

26.5%

-5.9%

39.1%

-9.3%12.3%

22.1%

198.1%

15.6%4.1%

105.3%

256.3%

27.3%

176.9%

-2.0% -2.1%

12.0%

-50%

0%

50%

100%

150%

200%

250%

300%

0%

1%

2%

3%

4%

5%

6%

7%

Top 20 Lenders: Total Loan

3Q2010 Change in Share from 3Q09


49.72% of All Financing


Top 20 New Lenders by Market ShareWho gained or lost share on New Vehicle Financing?

10.48% 9.69% 8.92% 8.47% 7.39% 4.38% 4.14% 3.03% 2.97% 2.60% 2.39% 2.08% 1.88% 1.66% 1.63% 1.60% 1.32% 1.26% 1.09% 0.98%

15.4%

-12.8%

30.2%

-23.5%

4.2%

30.7%

233.9%

-18.5%-23.5%

17.2%26.8%

6.2%24.8%

9.4%29.0%

13.8%-15.4%

118.0%

1.0%

-50%

0%

50%

100%

150%

200%

250%

0%

2%

4%

6%

8%

10%

12%

Top 20 New Lenders by Market Share

3Q2010 Share Change in Share from 3Q09


78% of New Financing


Top 20 Used Lenders by Market ShareWho gained or lost share on Used Vehicle Financing?

6.84% 4.20% 2.98% 2.84% 1.92% 1.54% 1.49% 1.45% 1.40% 1.26% 1.26% 1.23% 1.15% 1.12% 1.07% 1.04% 0.99% 0.82% 0.81% 0.80%

19.6%

-6.5% 2.1%

53.5%

20.0%

42.6%

204.1%

16.9%

57.3%

215.0%

8.6% 13.9% 19.8%

80.6%

0.9% 4.0%-15.4%

18.8%5.2%

37.9%

-50%

0%

50%

100%

150%

200%

250%

0%

1%

2%

3%

4%

5%

6%

7%

8%

Top 20 Used Auto Lenders by Market Share

3Q2010 Share Change in Share from 3Q09


35.6% of Used Financing


Vehicle FinancingHow has financing changed?

$22,743

$15,729

$25,273

$16,706

$

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

New Used

Average Amount Financed

Q3 2009 Q3 2010

Source: Experian AutomotiveYOY Change

$977

$2,530

$20,342$21,576

$22,963 $23,722$22,655$21,866

$23,981$25,793 $26,579

$25,107

$10,000$12,000$14,000$16,000$18,000$20,000$22,000$24,000$26,000$28,000

Deep Subprime Subprime Nonprime Prime Super Prime

Average Amount Financed: New Vehicles

Q3 2009 Q3 2010

$11,797

$13,652$14,867

$16,238$16,999

$12,876

$14,784$15,968

$17,369 $18,044

$5,000

$7,000

$9,000

$11,000

$13,000

$15,000

$17,000

$19,000


Average Amount Financed: Used Vehicles

Q3 2009 Q3 2010


Vehicle Values and Loan-to-ValueHow do the lenders and risk segments compare?

Source: Experian Automotive and NADA Used Car Guides

120.47%122.49% 122.04%

117.64%

103.05%

149.90%

139.51%135.28%

131.62%

120.62%

80%

90%

100%

110%

120%

130%

140%

150%

160%

Deep Subprime

Subprime Nonprime Prime Super Prime

Average LTV by Risk Segment

Average New LTV Average Used LTV

108.70% 109.49%105.00%

110.42%

120.08%

110.46%

129.49%

124.44%

130.92%

124.19%

144.30%146.51%

80%

90%

100%

110%

120%

130%

140%

150%

Market Totals

Bank Credit Union

Captive Finance Buy Here/Pay

Here

Average LTV by Lender Type

Average New LTV Average Used LTV


Vehicle PaymentsHow have monthly payments changed?

$422

$331

$452

$343

$250

$300

$350

$400

$450

$500

New Used

Average Monthly Payment

Q3 2009 Q3 2010


$12

$30

$431 $428 $424 $424 $421

$451 $457 $455 $456 $452

$400

$420

$440

$460

$480

$500


Average Monthly Payment: New Vehicles

Q3 2009 Q3 2010

$343$334

$320 $325$334

$357 $352

$334 $335$343

$300

$320

$340

$360

$380

$400


Average Monthly Payment Used Vehicles

Q3 2009 Q3 2010


Vehicle Loan TermsHow have terms changed?

62

57

63

58

36

48

60

72

New Used

Average Term

Q3 2009 Q3 2010


1

1

67.35 67.76 66.92 65.6960.91

68.68 68.66 67.61 66.2961.52

36

48

60

72


Average Term: New Vehicles

Q3 2009 Q3 2010

46.95

55.5258.48 60.10 59.09

50.39

57.45 59.46 60.80 59.56

36

48

60

72


Average Term: Used Vehicles

Q3 2009 Q3 2010


Vehicle Loan RateHow have rates changed?

5.77%

9.17%

4.98%

8.83%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

New Used

Average Rate

Q3 2009 Q3 2010


-79 bps

-34 bps 14.02%11.44%

8.17%6.24%

4.80%

13.54%

10.45%

6.94%5.20%

3.94%

0%2%4%6%8%

10%12%14%16%


Average Rate: New Vehicles

Q3 2009 Q3 2010

16.25%14.26%

10.66%8.33%

6.54%

17.81%14.71%

10.18%7.44%

5.49%

0%

5%

10%

15%

20%


Average Rate: Used Vehicles

Q3 2009 Q3 2010


Average Rates by LTVHow do rates and scores vary by LTV?

Source: Experian Automotive and NADA Used Car Guides

5.02%

4.45% 4.33% 4.35% 4.41% 4.61%4.83% 4.91% 5.01% 5.14% 5.28% 5.34% 5.46% 5.60% 5.66% 5.62% 5.63% 5.62% 5.54% 5.45%

6.93%6.46% 6.48% 6.62% 6.75%

7.06%7.32%

7.64%7.95%

8.24%8.62%

9.01%9.42%

9.68% 9.85% 9.79% 9.80% 9.80% 9.71%10.08%

2.5%

3.5%

4.5%

5.5%

6.5%

7.5%

8.5%

9.5%

10.5%

Average Rate by LTV

Average New Rate Average Used Rate


In Summary

Overall loan portfolios are strong with highest risk segments decreasing and improved delinquenciesOriginations showing signs of loosening as subprime experiences first increase since 2007

► Used financing still decreasing year-over-year in highest risk tier► New financing increased across all segments except super prime

Finance companies experienced greatest growth trend with captives gaining market share

► Finance companies carry highest LTVs Consumer loans grew by $1,401 overall with payments and terms also increasingRates continue to adjust in the higher risk used loans


Mark your calendars

Q4 2010 Automotive Credit

Trends Briefing

February 24, 2011

state of the automotive finance market third quarter … experian automotive national vehicle...

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