Auto Finance Used Values, LTVs Dip in Latest Report

By Jeffrey Bellant

Experian’s State of the Automotive Finance Market Q1 released on June 1 showed franchise dealers gaining used market share while used subprime loans continue near record lows.

The report, prepared by Melinda Zabritski, Experian’s senior director of automotive financial solutions, showed that more than 52% of used car transactions took place through franchise dealers, compared to 50% during the same time last year.

Although the average amount financed for used loans slid to $26,420 from $28,010 last year (Q1), the average interest rate shot up to more than 11% from just over 8% Q1 2022.

This was reflected in the average used monthly payment which rose to $516, from $505 this time last year and $414 in 2021.

The average loan term was over 67%, slightly lower than 2022.

The report showed that even as used loan amounts fell across all credit segments, payments rose with even Super Prime customers seeing the average used loan monthly payment rise $19 compared to $16 for Prime loans and less than $9 for the other segments.

Values and loan-to-value (LTV) amounts fell for used vehicles. Used values fell to $25,603, nearly $3,000 less than 2022.

As rates rise for used loans, term lengths increased for lower scoring segments.

For example, rates for Deep Subprime consumers were nearly 62 months and Subprime hit nearly 66 months.

The average rate for Deep Subprime consumers was more than 21% while Subprime topped 18%. Prime used loans were 8.75% and Super Prime loan rates averaged 3%.

Another trend is the rise in shorter term used vehicle loans. The per-