| NEW YORK, Sept 3
NEW YORK, Sept 3 A record number of U.S.
consumers are taking out loans to buy cars, especially those
purchasing used vehicles, according to data released on
In the second quarter, 85 percent of new car purchases and
53.8 percent of used car purchases were financed, according to
data from Experian Plc, an information provider.
That was up 0.5 percentage points and 0.9 percentage points,
respectively from the same period in 2013.
Additionally, the size of auto loan amounts and monthly
payments continued to rise, especially for used cars. Since the
second quarter of 2013, the average used vehicle loan rose 1.9
percent to $18,258 and the average monthly payment on such
vehicles rose 1.1 percent to $355, both all-time highs.
"More and more consumers, especially those that are credit
challenged, are turning to the used vehicle market as a viable
option to purchase their next car," said Melinda Zabritski,
senior director of automotive finance for Experian, in a
Banks were the largest lenders to consumers buying used
cars, financing 35.6 percent of all such purchases, or 0.8
percentage points less than the second quarter of last year.
In recent years banks have begun to focus more on the used
car market as automakers' in-house financing arms came to
dominate the new car market. Such "captive"
finance companies made more than one out of every two new car
loans in the second quarter, according to Experian.
Regulators have become more concerned with banks'
willingness to lengthen terms on car loans, lend to borrowers
with lower credit scores and give out loans that are larger than
vehicles are worth.
In addition, the U.S. Department of Justice has started
investigating subprime auto loans that companies such as General
Motors Co's auto financing arm and Santander Consumer
Holdings USA Inc have made and securitized since 2007.
But at least in the second quarter, the share of both new
car and used car loans that went to borrowers with subprime
credit scores declined, according to Experian.
"Lenders are still showing cautionary signs when lending to
the subprime market and keeping their risk at manageable
levels," Zabritski said.
Wells Fargo & Co remained the largest U.S. auto
lender in the second quarter with a market share of 5.75
percent, down from 5.89 percent a year prior.
Capital One Financial Corp surged past JPMorgan
Chase & Co to become the third largest U.S. auto lender
after Ally Financial Inc. The McLean, Virginia-based
bank's share of the used car market rose from 3.77 percent to
(Reporting by Peter Rudegeair; editing by Andrew Hay)