Just as in the UK, US new vehicle registrations have rocketed at the start of 2013, passing five million sales by the end of April, a rise of 7.2% year-on-year, and 18.9% compared to the same period of 2011.
The 1.3 million sales in April alone was the highest for the month since 2007.
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With this has come growth for most major motor finance companies in the US. Across the five states – California, Michigan, New York, Texas and Virginia – taken by Auto Finance News as a sample of the US market, Toyota Financial Services (Toyota FS), Ford Motor Credit, Ally Financial and Chase Auto Finance (Chase AF), the four companies to feature in the top 10 loan / lease providers in each state in October 2012, were joined by Wells Fargo Dealer Services (Wells Fargo DS) in February 2013.
Although Toyota FS was the biggest financer and biggest manufacturer captive finance partner by volume, the greatest average market share across the five states was held by Ally Financial.
By total volume and average market share, Chase AF was the largest independent financer, as in October 2012.
As was the case in October, Toyota FS has witnessed a leap in growth by volume, rising by 20.58% year-on-year to 38,473 loans and leases across the five states in February 2013. However, Chase AF has bettered this with 20.69% growth, to 28,127 contracts.
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By GlobalDataDespite this, there are more numerous examples of individual companies seeing losses by volume year-on-year than in the previous US market cross-section. In October, of the four companies to feature in the top 10 for each state, only Ford Motor Credit in Michigan and Ally Financial in Virginia witnessed a year-on-year decline in business.
By the February sample, Wells Fargo DS was down by 3.95% to 1,094 contracts in Michigan and by 7.27% to 3,047 contracts in New York, although up by 3.94% overall to 30,821 loans and leases.
There were individual state losses for Ford Motor Credit – in California: down 22.00% to 5,796 contracts in the month – and Ally Financial, which dropped by 9.62% by volume year-on-year to 9,918 contracts in Texas and by 22.34% in Virginia to 1,147 contracts.
Toyota FS also saw more business in February than any other finance provider in each of the five States except Michigan – dominated by Ford and General Motors – and Texas, where it was second to Ally.
As in October, although California is the most-populous state, it’s total contract volume was second to that of Texas (geographically, the largest state in the sample), by 158,785 loans and leases to 179,818.
More than other states in the sample, California was dominated by two finance providers, Toyota FS and Wells Fargo DS, which took market shares of 10.46% and 9.59% respectively, while Texas had one of the most even spreads of business between the top 10, from Ally Financial (9,918 contracts) in first place to 10th-place Santander Consumer Finance (4,770 contracts), which has its headquarters in Fort Worth.
Although considering listing its car finance operations in the US shortly after the October sample, the Spanish bank subsidiary announced a 10-year agreement to run in-house finance in the US for the Chrysler Group in February.
By state, and across all companies, the discrepancies of product popularity can be seen.
While used loans take up a 34.17% market share in more-affluent New York, they account for more of the market heading south: 56.46% in Virginia and 60.02% in Texas. However, used loans outnumbered new in all five states.
Michigan was the only state to see used leases taking up more than a third of a percent of all contracts, with the product taking 1.72% of the market of The Great Lakes State.
New leases were most prominent in New York at 33.46% of the market, or 30,601 contracts, and new loans were most prominent in California at 34.63% of the market, or 54,989 contracts.
US deal lengths up, defaults waver
According to the US arm of Experian Automotive, the average term length for an auto loan hit a record 65 months in the final quarter of 2012, compared to 63 months on a new car and 60 months for a used car for Q4 2011.
Between the two periods, the average rate of interest on a new car loan fell from 4.52% to 4.36% while the average monthly payment fell 1.71% to $460 (just over £300).
Subprime lending accounted for 43.2% of all car agreements in Q4 2012, the highest level for a final quarter since 2007.
The ratio of borrowers more than 60 days in arrears was 0.74% in the final quarter of 2012, up from 0.72% the year before, and the first year-on-year rise for a quarter since 2009. However, US credit reference agency TransUnion put the 60-day delinquency rate at 0.41%, down from 0.46% at the end of 2011, but up from 0.38% in Q3 2012.
richard.brown@timetric.com
Footnate for graphs: Figures are from total portfolios (loans and leases) for each lender, across California, Michigan, New York, Texas and Virginia in February 2013. These five finance companies were the only ones to appear in the top 10 lenders by volume in all five states. All five companies were in the top 10 lenders in all same five states in October 2012, apart from Wells Fargo Dealer Services. This February, American Honda Finance appeared in the top 10 in four of the states and Nissan International Financial Services appeared in three, as did Capital One Auto Finance. Source: AutoCount / Experian Automotive unless otherwise credited.
