The average used loan payment dipped to $525 compared to $536 in Q2 last year, while the averaged used rate rose to 12.01% from 11.47% in 2023. The average amount of used vehicle loans financed also fell year-over-year (YOY) to $26,48 from $27,316. However, loan amounts financed rose 0.73% quarter-over-quarter after dropping the previous three quarters. The same trend is reflected in the used loan amount, which rose $191 in Q2, after dropping in the previous three quarters. Across all used loans by independent deairs, more than 37% were under $400 per month, although 20% were between $400 and $499.

Used loan amounts and payments fell for all finance segments except Deep Subprime, which saw total loan amount financed rose $284 YOY and monthly payments rise $7. Likewise, used vehicle values fell YOY for all segments except Deep Subprime which rose $449, compared to Prime and Super Prime which both saw drops topping $1,000. Loan-to-Value (LTV) amounts drop across all used vehicle finance segments, with Average Clean Retail (ACR) LTVs falling to 118% YOY compared to over 125% in 2023. LTV rate for Deep Subprime fell more than 4% for Deep Subprime and more than 3.5% for Subprime. 

Interest rates for used vehicle loans YOY rose across all segments YOY with the biggest rate increases in the Subprime and Near Prime segments which both rose over 0.8% YPY. Used loan rates rose across all finance segments, from more than 7% on Super Prime rates to 21.55% on Deep Subprime loans the change in those rates YOY. Used loan terms rose slightly across all finance segments, which Deep Subprime seeing the biggest jump at 1.79. YOY.

The State of the Automotive Finance Market Q2 Report also showed more than 70% of all used loan terms top 70+ months, even though credit scores also increased across all terms. Shorter term loans saw a reduction in loan rates, with those 48 months and below dipping slightly to 1.05% from 12.26%, while the biggest increase in loan rates was in the 73- to 84-month terms.

KY has the largest share of purchases as used vehicles; NY the lowest

Overall outstanding automotive loan balances have risen YOY, though 70% of that is in the Prime and Super Prime segments. Delinquent balances in the 30-day category are up 16 basis points (bps), while 60-day delinquencies are up 6bps. Delinquency percentage of auto loan balances past due in Q2 2024 rose to 2.88% compared to 2.72% in the same period last year.

The current 60-day delinquency rate for used was 1.11% and that was higher at 1.54% for used loans sold by independents. Used vehicles made up nearly 42% of all vehicles financed, an increase from 39.24% YOY.

Subprime originations continued to fall, hitting 15.7% of all new/used loans, which lower than it’s been since before 2019.Subprime loans were at 16.7 % of all loans in Q2 this year.

On the new-car side, leasing rose YOY to 25% of all new vehicles in Q2 202, compared to just over 21% in 2023 during the same time period.  SUVs and Wagons made up more than 61% of all new-vehicle financing while coupes (1.35%) and convertibles (0.53%) made up the least. Over 13% of all new-vehicle payments (loan and lease) topped a whopping $1,000 per month. EVs topped 8% of all new vehicle financed, while hybrids neared 10% and plug-ins were just below 2%.

However, the percentage of EVs being purchased YOY dropped from 53% in 2023 Q2 to 36.8% in 2024, while the percentage of EV being leased rose to more than 46%.

Over 47% of all new EVs financed were from Telsa. The Tesla Model Y made up more than 36% of the new EVs financed in Q2, while Tesla’s Model 3 was just under 10% of new EVs financed. The Tesla Model X was at 2.14% Used vehicle loan amounts and payments have dipped despite rising interest rates, according to Experian’s Q2 State of Automotive Finance Market Report released this month.