Summer Sizzle for Vehicle Sales: Trends, Insights and Tips to Capitalize

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Information about Summer Sizzle for Vehicle Sales: Trends, Insights and Tips to Capitalize

Published on June 8, 2016

Author: ExperianBusiness

Source: slideshare.net

1. Summer Sizzle Vehicle Sales Will LENDERs Capitalize? for

2. The summer months mean consumers are hitting dealer lots to score their next set of wheels. Are lenders positioned to be a part of the financing solution?

3. It’s true – vehicle sales do see an uptick in the summer months … Edmunds says: Car shoppers keep flooding showrooms, a trend that’s expected to continue for the rest of the year.2 JAN FEB MAR APR MAY JUN JULY AUG SEP OCT NOV DEC 1,400,000 1,200,000 1,000,000 1,800,000 1,600,000 US Light-Duty CY15 Vehicle Registrations1 2 http://www.edmunds.com/car-news/strong-april-car-sales-to-preview-hot-summer-selling-season.html 1 Experian Automotive, 2015

4. 2010 2011 2012 2013 2014 2015 $27,022 $25,503 $25,067 $24,655 $24,437 $26,078 AVERAGE manufacturer's suggested retail price3AVERAGE manufacturer's suggested retail price3 And vehicle prices have climbed, leading more to finance. 2 Experian Automotive and NADA Used Car Guides – Q4 2015 1 Experian Automotive – Q1 2016 PERCENTAGE OF VEHICLES WITH FINANCING5PERCENTAGE OF VEHICLES WITH FINANCING5 NEW USED 86.3% 55.3% AVERAGE MANUFACTURER’S SUGGESTED RETAIL PRICE2 PERCENTAGE OF VEHICLES WITH FINANCING1

5. New vehicle loan amount, monthly payment and term all inch higher. AVERAGE NEW MONTHLY PAYMENT1 AVERAGE NEW LOAN TERM1 AVERAGE NEW LOAN AMOUNT1 AVERAGE NEW MONTHLY PAYMENT4AVERAGE NEW MONTHLY PAYMENT4 NEW LOAN 2015 NEW LEASE $406$406$405$405 $503$503 $488$488 2016 2015 2016 AVERAGE NEW LOAN AMOUNT4AVERAGE NEW LOAN AMOUNT4 $28 7 1 1 $30 0 3 2 , , 2015 2016 AVERAGE NEW LOAN TERM4AVERAGE NEW LOAN TERM4 2015 2016 67MONTHS 68MONTHS 1 Experian Automotive – Q1 2016 compared with Q1 2015

6. And used vehicle loan amount, monthly payment and term have increased as well. AVERAGE FRANCHISE USED TERM1 AVERAGE FRANCHISE USED LOAN AMOUNT1 AVERAGE FRANCHISE USED MONTHLY PAYMENT1 $19 8 8 4 $20 7 2 3 , , 2015 2016 2015 2016 65MONTHS 66MONTHS 1 Experian Automotive – Q1 2016 compared with Q1 2015 2015 $376$376$368$368 2016

7. While average loan rates are showing some increases, they still remain historically low. 1 Experian Automotive – Q1 2016 AVERAGE LOAN RATES1 AVERAGE LOAN RATE BY RISK TIER FOR Q1 20161 + -4.71% NEW + -4.79% + - 8.03% + -7.81% FRANCHISE USED Q1 2015 Q1 2016 Q1 2015 Q1 2016 NEW FRANCHISE USED 4.6% 9.12% 15.25% 3.29% 6.57% 11.03% AVERAGE FRANCHISE USED AVERAGE NEW 4.6% 9.12% 15.25% 3.29% 6.57% 11.03% AVERAGE FRANCHISE USED AVERAGE NEW PRIME NONPRIME SUBPRIME 4.6% 9.12% 15.25% 3.29% 6.57% 11.03% AVERAGE FRANCHISE USED AVERAGE NEW PRIME NONPRIME SUBPRIME

8. So who is capturing the finance business?1 Captives often have an edge if incentives are linked with the manufacturer, and especially in the lease space, but lenders can wedge themselves in if they present attractive rates – before consumers set foot in the dealership, or afterwards with a re-fi. 34.8% BANK 26.2% 18% 13.4% 7.7% CAPTIVE CREDIT UNION FINANCE CO. BHPH 1 Experian Automotive – Q1 2016

9. • Identify consumers likely to be in the market for a new or used vehicle within the next 30 to 120 days using predictive tools and analytics. • Gain visibility to a consumer’s current auto financing and estimated interest rate and present a more attractive rate – perhaps a refi on a dealer-arranged loan. • If you bring in a new auto customer via the indirect route (dealer financing), grow the member relationship within the first 90 days. How to grow auto share THIS SUMMER... © 2016 Experian Information Solutions, Inc. • All rights reserved Experian and the Experian marks used herein are trademarks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners. This information is for educational purposes only. It is not intended to be nor should it be relied upon as legal advice. If you have questions about the information contained herein, you should consult your own legal and compliance departments.

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