According to Experian’s State of the Automotive Finance Market Report: Q2 2022, the average new vehicle interest loan rate for consumers with a credit score between 501 and 600, also referred to as subprime, was 9.75%—compared to prime consumers with a credit score between 661 and 780, who had an average new vehicle interest loan rate of 4.03% this quarter.

Leasing has long been a popular choice among consumers who want to enjoy the latest vehicle models, but at a lower monthly payment. In fact, the average monthly lease payment was $127 less than a loan payment in Q2 2022. However, in recent quarters, we’ve seen leasing availability decline due to current market conditions. According to Experian’s State of the Automotive Finance Market Report: Q2 2022, leasing declined from 27.82% to 19.65% year-over-year, marking the lowest drop in quite some time. When analyzing previous data, leasing comprised 30.41% of all new vehicles in Q2 2018, decreasing to 30.04% in Q2 2019 and 26.58% in Q2 2020. There are likely a number of factors contributing to the decline of leasing over recent years, including the ongoing inventory shortages and OEMs not offering as many incentives, which may result in leasing opportunities becoming less common. Other scenarios can be consumers choosing to extend their lease, or purchase the vehicle once their lease has expired. In Q2 2022, the average monthly lease payment increased to $540, from $475 in Q2 2021. Though, the average monthly loan payment for a new vehicle surpassed $600 this quarter—coming in at $667, an $85 year-over-year increase. As automotive professionals continue to navigate through the inventory shortages and subsequent vehicle price increases, understanding the landscape and what options are available for consumers will be critical. One way to keep on top of the trends is analyzing the pricing options for the most popular leased models, which will enable more informed decisions in the months to come. Average monthly payment for top leased models As previously mentioned, there was an average payment difference of $127 between a lease and a loan in Q2 2022. However, that’s just an average, and these numbers can vary based on the vehicle type. For example, the average monthly lease payment for a Honda Civic was $363 in Q2 2022, as opposed to the average monthly loan payment of $476. In comparison, the average monthly lease payment for a Ford F-150 came in at $516 this quarter, compared to the average monthly loan payment of $832. While a pickup truck may typically have a higher average monthly lease payment than a sedan, consumers are continuing to choose larger vehicles, overall. In Q2 2022, there was only one sedan that made up the top leased vehicles—with the Ford F-150 having the highest leasing registration volume, comprising 2.3% this quarter. Rounding out the top five were Chevrolet Equinox (2.27%), Honda CR-V (2.16%), Honda Civic (2.09%), and Ram 1500 (1.81%). Despite the overall decline in leasing over the past year, it continues to be a financing option that consumers can consider amid vehicle prices increasing. Knowing what vehicles are most prevalent as well as their price points will allow professionals to create strategies that cater to the most current consumer financing preferences during their search for a vehicle that fits their needs. To learn more about leasing and other automotive finance trends, watch the entire State of the Automotive Finance Market: Q2 2022 presentation on demand.

To help your marketing dollars go further in 2022, developing multichannel strategies that more efficiently incorporate both traditional and online consumer audiences is key to more effective campaigns. Doing this well requires marketers to understand your consumers and how they best respond to marketing, including what channel (direct mail, email, OTT banner ads) or what message (vehicle reliability, value for dollar, celebrity endorsement) works best. Working with the right partner for audience insights enables you to segment audiences and filter for automotive criteria that drive more targeted, segmented marketing. What are traditional audiences? In most cases, traditional (sometimes referred to as offline) audiences include consumers reached through radio, standard TV, billboards, text, direct mail, or phone calls. To fulfill any traditional audience strategy, a dealer or agency requires consumer Personally Identifiable Information (PII) such as name, email address, mailing address, or phone number. Traditional marketing has also been called direct marketing when the marketing is sent specifically to a home address, email address, or phone number. For instance, when utilizing direct mail, automotive marketers require the most up-to-date consumer information to ensure they reach the correct mailbox. To reduce cost and personalize the marketing experience, the best marketers utilize audience sources based on strong data sets unique to the automotive world. For example, targeting consumers driving a particular vehicle or nearing the end of their lease is more effective than just sending a generic message to an entire geographic area. Even with the explosive growth of digital marketing, direct marketing remains relevant. Consumers still respond and use offers sent to their mailboxes, and personalized mailers still result in vehicle sales or service appointments. While there is a higher cost per thousand than digital marketing, direct marketing still earns an essential place in the automotive retail media mix. What are online audiences? Online audiences are typically consumers reached through 0ver-The-Top (OTT) advertising, banner ads, or addressable TV. When using these marketing channels, PII is not needed. Online marketing can encompass many different methods to reach customers, including social media, email, websites, blogs, and search engine traffic. Nearly every business will benefit from online marketing because it's a great way to reach people where they already are—online. Online marketing has grown in a digital world where so many people rely on their cell phones to organize their day, conduct research, and communicate with the world. According to Tech At Last, “most households now have between 5 and 10 screens. Those numbers include tablets, PCs, notebooks, smartphones, and televisions. These devices include any screen that enables users to watch or read content.1 Audience modeling can help simplify the chaos of digital channel segmentation Utilizing digital channels allows marketers to reach consumers where they increasingly spend their time. Whether it is their Inbox, streaming service, social media, or other digital platforms, knowing consumer preferences makes the marketing experience more meaningful. In other words, capitalizing on audience modeling to determine the best channel and how the consumer engages with the channel can make all the difference. For example, to showcase your new Hybrid, you may not want your video advertising shown on a YouTube channel about construction! The same commercial would resonate far better on a channel with DIY or gardening shows. To best capitalize on addressable TV, 0ver-The-Top advertising, or banner ads, marketers should work with an audience provider who can identify targeted segments based on psychographic, demographic, and geographic data allowing for more effective marketing. Look for a provider like Experian Automotive that can deliver a robust database, extensive consumer insights, and deeply established partnerships for audience activation (social media or TV), allowing your marketing dollars to work harder with extended reach. Whether you are looking to reach consumers online or traditionally, reaching the right consumers with the right message on the right channel is always the goal. To achieve this, working with a third party for audiences built on clean data is necessary. If you can segment the audiences or filter for automotive criteria, your marketing dollars and messaging will go farther! 1TechAtLast (2014) The Average Number of Screens in a Home Has Increased 

I love the random “National” holidays that are popping up. Did you know we recently celebrated National Chocolate Chip Cookie Day? It’s no 4th of July or Labor Day, but I love cookies, so I’m gonna roll with it. Today, we will chat about Identity Resolution in relation to strategic marketing. So, believe it or not, I’m going to tie in Identity Resolution to chocolate chip cookies! (By the way, if you haven’t read my last two blogs, this is a trend! Check it out:) Use Data Insights for an Eagle’s Eye Approach to Marketing (National American Eagle Day) Building the Perfect Audience is Like Building the Perfect Burger (National Hamburger Month) What is identity resolution? Identifying who you want to target as part of a strategic marketing campaign is critical as a marketer in the auto industry. Experian defines this process as identity resolution or “the ability to stitch together and unify the names, addresses, emails, device IDs, cookies (not the yummy kind), and other identifiers associated with customers.” Today’s marketers risk working with outdated, fragmented, or incomplete data without proper identity resolution, which correlates to inefficient campaign targeting and wasted marketing dollars. So, let’s use baking a chocolate cookie as an example. For the perfect cookie, you need flour, white sugar, brown sugar, salt, baking soda, butter, vanilla, eggs, and chocolate chips. There are a lot of ingredients, and you need all of them to make a complete cookie. When it comes to targeting consumers, let’s say you only have fragmented pieces of customer information for a woman who bought a car from you (partial ingredients). You have her name, the address where she lived when she purchased the car, and what looks like a work email address (that has bounced). So, it’s like having the flour, eggs, and sugar for your cookie! But you need the rest of the ingredients for the recipe, and you need to confirm whether any key ingredients have expired or “gone bad.” Or you may have customers you know through analytics who have visited a dealer or OEM website, but you can’t track them down further. You have an electronic footprint but no other identifying data. So, you have the critical ingredient like flour, but it’s not necessarily super helpful unless you have other pieces to complete the recipe. Find the missing ingredients with identity resolution solutions Marketers need to utilize solutions like data hygiene, database management, additional data append, digital identity resolution (to link anonymous online IDs to data assets), and identity graphs to help create a complete view of their customers and prospects. In other words, some solutions can help bring all the ingredients together to make a “whole” cookie or a “whole” customer. You’re ready—add the chocolate chips and bake! I realize that identity resolution can be complicated, so we’ve written a resource with examples/scenarios and the corresponding solutions that can help resolve typical challenges. Download a complimentary copy of Identity Resolution: Helping marketers deliver personalized communication for life. At Experian Automotive, we are experienced in unifying fragmented data points across offline and online touchpoints to create a complete view of your best auto customers and prospects. Feel free to reach out to discuss our solutions or to share your favorite chocolate chip cookie recipe.

Consumers are shifting to used vehicles over new, with a higher percentage of consumers financing used. The move comes as the industry continues to grapple with inventory shortages, driving vehicle values higher.

According to Experian’s Automotive Market Trends Report: Q1 2022, new vehicle registrations were down 19% from the prior year—declining to 3.4 million. Used registrations went from 11.4 million to 9.9 million year-over-year, decreasing 13.2%.

Whether a consumer has a brand-new or used vehicle, it’s inevitably going to need regular maintenance and require repairs. Fortunately for aftermarket professionals, the aftermarket “sweet spot” is continuously growing—a trend that should be watched closely. Vehicles in the sweet spot are typically between six- to 12-model-years-old and have aged out of general OEM manufacturer warranties for any repairs. Knowing the model year and type of vehicles that are in operation will be important for aftermarket professionals to determine what parts may be needed, and anticipate potential consumer needs. According to Experian’s Automotive Market Trends Report: Q1 2022, 35.8% of vehicles in operation (VIO) now fall within the aftermarket sweet spot, a 6.5% year-over-year increase. It is important to note that the aftermarket sweet spot max volume record of 104 million is expected to be broken over the next 12-18 months, considering the sweet spot volume was 100.3 million through Q1 2022 and the last time it exceeded that number was nine years ago. The increase will create more opportunities for aftermarket professionals as more vehicles will potentially need maintenance. Aftermarket “sweet spot” will continue to grow Right now, the aftermarket sweet spot consists of model years between 2011 and 2017. There were 10.5 million 2011 model year vehicles on the road through Q1 2022, this low volume will transition into the post-sweet spot next year. At the same time, there will be 16.5 million 2018 model year vehicles entering the sweet spot. Furthermore, an estimated 16.7 million vehicles in operation with a 2019 model year and almost 14.3 million vehicles in operation with a 2020 model year will be transitioning into the sweet spot in the next two years. When these model year vehicles enter the sweet spot, the current 12 million vehicles with a 2012 model year and an estimated 13.7 million 2013 model year vehicles will transition into the post-sweet spot, resulting in a notable increase. Watching this data closely will allow aftermarket professionals to continue assisting with maintenance and repairs for these vehicles that are currently on the road, as well as prepare for what’s to come to the aftermarket industry in approaching years. To learn more about other vehicle registration trends, watch the full Automotive Market Trends Report: Q1 2022 presentation on demand.

As competition for used vehicles remains fierce, dealers must make quick decisions on whether to acquire a potential vehicle—or someone else will. Whether you need to evaluate a trade-in or want to make a flat-out offer on a vehicle, quickly accessing the vehicle’s history is only the first step. What if you could determine the likelihood that a vehicle will be on the road in five years and compare it to other similar vehicles? Would this help in your decision-making? Use the AutoCheck Score to evaluate vehicles for your lot The patented AutoCheck ScoreSM was developed to help dealers determine the likelihood that a vehicle will be on the road in five years. The AutoCheck Score summarizes vehicle history data into an easy-to-understand “score” and provides an equivalent score range. Understanding the likelihood that a unit will still be on the road in five years gives dealers more perspective on a vehicle’s desirability and can help you accurately price it. Use the AutoCheck Score to more accurately merchandise vehicles The AutoCheck Score range will give you similarly aged and classed vehicles for comparison that you can use to help merchandise the vehicle for market and help manage consumer conversations regarding the vehicle’s price. How does the AutoCheck Score work? The AutoCheck Score analyzes various characteristics, including age, segment, mileage, number of owners, vehicle use, vehicle events, accidents, theft, and title brands. Essentially, this score summarizes the AutoCheck Vehicle History Report fields and delivers a “score range” that allows you to compare the actual vehicle (score) to other similarly aged and classed vehicles. The score is based on a scale of 1 to 100, but reading the score in conjunction with the score range is essential since looking at the score without knowing the range will reveal only half the story. Check out the example below. Car #1 has a lower score than Car #2. However, look at the score ranges (73-86). For Car #1, other comparable vehicles should fall into a range from 73 to 86, and this car scored an 84. That means the vehicle is within the AutoCheck Score range compared to other similar cars of the same age and class. Car #2 has a score of 89. Because this is higher than Car #1’s score, you might assume this car has a more favorable vehicle history, but that’s not entirely accurate. Comparable vehicles should score in a range from 90 to 95, and this car falls short. That means the car’s history is slightly less favorable compared to similar vehicles of the same age and class. In today’s competitive environment though, dealers may decide to take in both trades, and the AutoCheck Score can also help make decisions on how to price the vehicles for market. Become an AutoCheck member today As an AutoCheck subscriber, you’ll have access to the AutoCheck Score. Between the large graphic display and the simple number comparison, the AutoCheck Score can help you make decisions on vehicle acquisition much quicker and easier!

According to Experian's State of the Automotive Finance Market Report: Q1 2022, SUVs and CUVs made up 60.38% of total vehicle financing, an increase from 58.95% in Q1 2021.

Last month my blog discussed how Building the Perfect Audience is Like Building the Perfect Burger! It was National Hamburger Month, so it seemed apropos! We offered marketers insight into building better audiences to help run more strategic marketing campaigns. This month, I am keeping with the monthly ‘holiday’ theme. June 20th was National American Eagle Day and being so close to our 4th of July holiday, I thought this was a perfect tie-in this month! You are probably wondering how I am going to tie in National American Eagle Day with another marketing strategy, but I promise you, I can! It’s all about having strategic insight into your customers and using an “eagle eye” to learn what you can about them to obtain better results from your marketing efforts. An eagle's-eye approach to finding and reaching the right consumers Here are a few fun facts about the great American Bald Eagle. Bald Eagles were placed at the center of the Great Seal of the United States in 1782! “Bald” in Bald Eagle refers to an old English word that means “white-headed.” We’ve all heard people talk about having an “eagle eye.” It’s true—this comes from the eagle’s astonishing eyesight. Eagles can see clearly and about eight times as far as humans can, allowing them to spot and focus on a rabbit or other prey at a distance of about two miles. Can you imagine? They can also look ahead and to the side simultaneously with a 340-degree visual field! Imagine if you had an eagle-eye, 340-degree view of your customers or prospects before running a marketing campaign. Well, you can. Experian data insights offers an eagle-eye approach to finding and reaching the right consumers at the right time in the buying journey to help you eliminate marketing waste and deliver a more significant return on your marketing spend. Understanding your customers is key With Experian’s Insights solution, as part of our comprehensive Experian Marketing Engine, we offer OEM marketers, agencies, and larger dealer groups access to multiple Insight categories to learn more about your customers. Understanding your current customers or the segment of prospects you would like to target allows for a more strategic approach to marketing campaigns. Our brand, model, registration, title, finance, market analysis, lifestyle, and household insights can help you take a 360-degree view of your customer (that's right, 360 degrees, 20 degrees more than an eagles eye!) There’s a lot of discuss here, so we’ve put together a complimentary resource, Understand Your Customer Before Choosing Your Audience that explains all the ways you can use Insights to learn more about your customers. What is the Experian Marketing Engine? Insights is part of the Experian Marketing Engine marketing solution that helps automotive marketers, manufacturers, advertisers, agencies, and platforms identify the right audience, uncover the most appropriate communication channels, develop messages that resonate, and measure the effectiveness of marketing activities.

According to Experian’s State of the Automotive Finance Market Report: Q1 2022, credit unions had their highest total share in five years

When acquiring inventory for your used lot, using AutoCheck Vehicle History Reports is like an ‘insurance’ policy! As the industrial-strength vehicle history report, AutoCheck helps dealers manage risk and confidently buy and sell more of the right vehicles. We’re so confident in our solution that we offer buyback protection. When is AutoCheck Buyback Protection available? AutoCheck Buyback Protection is available for vehicles with an AutoCheck vehicle history report if a certain title brand is found after the vehicle is reported to be free of the brand. AutoCheck Buyback Protection provides: A full year of coverage to protect consumers from major title problems that the Department of Motor Vehicles may have missed Coverage for the purchase price of the vehicle (up to 110% of the NADAguides.com published retail value) PLUS up to $500 in aftermarket accessories Title brands covered by the Buyback Protection plan include: Junk or salvage Dismantled, rebuilt, or reconstructed Flood damage Hail damage Fire damage Bought back by the manufacturer (“lemon law”) Odometer exceeds mechanical limits Odometer was not actual mileage How do consumers take advantage of AutoCheck Buyback protection? Consumers must register for AutoCheck Buyback protection within 90 days of the vehicle purchase date The AutoCheck report must have been run before purchasing the vehicle Consumers must provide a copy of the front and back of the branded title certified by the issuing state. The branded title must have been issued at least 60 days before the AutoCheck vehicle history report was run. Consumers must complete and submit a claim form and provide a complete copy of the AutoCheck vehicle history report Consumers have one year from the vehicle history run date to file a claim Don’t forget to remind your customers to register for the protection plan! Manage risk and protect your business with AutoCheck AutoCheck vehicle history reports can help you make the most informed decisions and minimize risk when purchasing a used vehicle! With tens of thousands of distinct accident sources, AutoCheck has more accident data than other providers. AutoCheck has data from over 95% of U.S. auction houses with 82% manufacturer coverage of open recall data for vehicles on the road We aggregate and analyze tens of thousands of distinct accident sources; many provided only to AutoCheck The only VHR integrated on all the top consumer vehicle shopping sites Become an AutoCheck Member Today!  

We are thrilled to introduce a new quarterly series, Automotive Consumer Trends & Analysis. For years, Experian has been delivering automotive insights in our State of the Automotive Finance Market and Automotive Market and Registration Trends quarterly presentations. We are now bringing similar insights and analyses to the automotive consumer market. At Experian, we understand that marketers need to have a deep understanding of consumers in order to develop targeted, effective marketing strategies. Whether you are an OEM marketer, an agency or large dealer group our presentations will transform complex market data into actionable insights that you can begin using immediately. Learn more about vehicle segments and consumers Would you like to understand which people are buying what vehicles with a clear view of what these consumers look like? The Automotive Consumer Trends & Analysis presentations will provide updated quarterly insights on specific vehicle segments and the associated consumers within that segment. We’ll answer questions like: How many vehicles are on the road? Where are they located? How have recent registrations shifted the geographic distribution? Which manufacturers are selling those vehicles? Who is taking market share from whom? Who are the consumers who registered those vehicles? What are the demographic and psychographic insights for those consumers? We’ll also cover industry news and provide a special market analysis Inaugural Presentation! Release Date: June 23rd Segment: Crossover Utility Vehicles (CUV) You’ll leave the presentation with insights you need to make more strategic marketing decisions and better connect with consumers. Register now for the Automotive Consumer Trends & Analysis quarterly series. Once you register, you’ll receive an email when the presentation has been released.

Today’s OEM marketers, agencies and large dealer groups are under tremendous pressure to connect with consumers across multiple marketing channels. Finding a wide variety of relevant audiences is critical to campaign success. Because May is National Hamburger Month (yep, it’s a real thing), I will compare building the perfect burger to building the ideal automotive audience. Here we go. First, imagine your favorite burger joint (or gourmet burger eatery). You start by opening the menu and likely seeing some of the house “standards.” These are the traditional favorites available “off the menu” with little fuss. Burger with American cheese, Burger with lettuce, onion and tomato. Easy peasy. These types of offerings are similar to what we call our Syndicated audiences. Experian has more than 600 syndicated audiences that are readily available and on the shelf of most trusted platforms. More Choices and Options After that, things get interesting with lots of options to make your burger exactly how you want it. Do you want beef, veggie, portobello mushroom or maybe even bison as your “burger” choice? Cheese? Sure, but what kind? American, cheddar, swiss, blue, pepper jack? And what about toppings? Fried onion strings, raw, cooked? Mushrooms? Jalapenos? Ketchup, mustard, hot sauce, chipotle? Don’t even get me started about your bun choices! You see where I am going with this. With Experian’s Audiences, we have four more levels after our Syndicated Audiences that can help you create the targeted audiences you need based on your specific strategy. From Syndicated to Premium to Custom: Build the Perfect Audience For example, do you need to target in-market customers for a new or used vehicle?  Equity positioning? End of term? Alternate fuels? A specific make and/or model? Do you need to target consumers by a particular price range? We can also build custom audiences based on your first-party data coupled with our data resources to help with vehicle launches, services campaigns and any unique audience need you have. We don’t expect you to understand all of this in a short blog, so we’ve written a complimentary resource, Automotive Audience Choices are Key to Ever-Changing Strategies, explaining each of the five categories of audiences. Download it to learn how to build the perfect burger—I mean audience. By the way, as a Midwestern girl, my favorite burger is a traditional cheeseburger with all the fixins—so bring on the sharp cheddar, lettuce, tomatoes, pickles and fried onions. What’s yours? Feel free to email me about burgers or audiences! Audiences is part of the Experian Marketing Engine marketing solution that helps automotive marketers, manufacturers, advertisers, agencies, and platforms identify the right audience, uncover the most appropriate communication channels, develop messages that resonate, and measure the effectiveness of marketing activities.

With used vehicle sales up 13% from 2020 to 2021, and auction volumes at historic lows, obtaining vehicles directly from consumers offers an opportunity for dealers to maintain a profitable sales pipeline. The key for dealers is to understand how their sales stack up against other local dealers — and more specifically, what types of vehicles those competitive dealers are selling. Dealers should take advantage of market visibility Experian’s marketing solution, the Automotive Intelligence Engine (AIE), offers dealers market visibility of pre-owned sales trends and recommends marketing strategies to help acquire used vehicle inventory. AIE provides specific strategies to help dealers acquire the most desired units and reach/resonate with consumers who are most likely to bring those units in on trade. Dealers can view: Who owns desirable vehicles the dealer would like to purchase Strategies to acquire and sell used units Sales trends such as segment, class, model, make and model Financing trends such as credit score, term, and lender Audience makeup: demographic and psychographic characteristics, who owns what type of vehicle, and where they live. By understanding the used owner, dealers can use messaging that resonates to help upsell them into a newer vehicle they desire—helping dealers stay competitive in today’s market. Dealers should also look at lending trends Exploring the world of used vehicle sales should also extend into lending trends. Since used vehicles are not included in OEM lending incentives, understanding trends helps dealers make more informed decisions. Used vehicles can qualify for special OEM sponsored CPO financing. With AIE, dealers have visibility into the amount financeable percentages, APR trends, terms, and tiers for lenders within their market. This benefits dealers to know which lenders are covering more significant percentages like 140% of NADA and what lenders are covering lower credit tiers. Knowing options on the lending side of the transaction empowers dealers to expand their financing options to work with lenders who facilitate lower credit scores or cover higher percentages. Learn how Experian’s Automotive Intelligence Engine can help you make more informed decisions about used car inventory acquisition. You may also be interested in reading more about audience segmentation and AIE in our blog, Data-Driven Audience Segmentation Empowers More Effective Omnichannel Marketing. 1US Used Car Market Finishes Strong in 2021: What's Up for 2022? | Nasdaq