Near- and Non-Prime Consumers Continue to Face Barriers in the New and Used Vehicle Markets

September 11, 2024

Open Lending, an industry trailblazer in automotive lending enablement and risk analytics solutions for financial institutions, recently released a new Near- and Non-Prime Consumer Update, continuing its quarterly report series on automotive lending trends among near- and non-prime consumers. The report covers vehicle sales volume, interest rates, payment trends, and consumer preferences in the first quarter of 2024. In addition to national data, this research offers findings on regional near- and non-prime automotive lending.

Using AutoCreditInsight^TM data*, the report offers insight into the opportunity for auto lenders to serve near- and non-prime consumers, a vital audience segment for financial institutions seeking member growth and greater yields in their auto lending portfolio. Key findings include the following:

• In the used vehicle market, low inventory and high prices are disproportionately impacting near- and non-prime borrowers nationwide. In the first quarter of 2024, vehicle registrations among prime and super-prime borrowers increased by 3% for used and 7% for new compared to the first quarter of 2023. Meanwhile, vehicle registrations among near- and non-prime borrowers decreased by 6% for used and climbed just 1% for new.
• Near- and non-prime borrowers are also facing regional differences in vehicle affordability. Average used vehicle prices are up 6% in Southeast, and average new vehicle prices are up 5% in the West, while the rest of the country has remained relatively flat for new and used.
• The Honda Civic remains the top-registered new vehicle and Ford F-Series the top-registered used vehicle among near- and non-prime borrowers.

“Although the automotive market shows signs of stabilizing, near- and non-prime consumers remain challenged in the used vehicle market. This is due to tightening availability of credit, persistently high interest rates and vehicle prices, and increased ownership and insurance costs,” said Kevin Filan, SVP of Marketing at Open Lending.

“Regardless of credit score, most Americans need reliable vehicles to access good jobs, care for their families, and climb the credit ladder,” Filan continued. “The automotive lenders who use alternative data, advanced risk analysis and default insurance are better equipped to identify the reliable, underserved near- and non-prime borrowers who will happily exchange their loyalty for more personalized loan pricing.”

For more insights, access the full report.

To learn more about Open Lending and the solutions they offer, connect with the GoWest Solutions Team today.

* Methodology – Data was sourced from AutoCreditInsight™, a business intelligence tool developed by TransUnion in partnership with S&P Global Mobility, looking at newly registered vehicles in the new and used categories through the first quarter of 2024. Registrations that did not have a VantageScore®4.0 associated with the record were excluded. Open Lending defines near- and non-prime as a VantageScore®4.0 in the 560 to 699 credit range and prime and above as a VantageScore®4.0 greater than or equal to 700.

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