Electric Vehicles Continue to Stand Out in the Alternative Fuel Type Market

From the vehicles we drive to the way we purchase them, everything in the automotive industry is evolving as new technologies, shifting incentives, and changing consumer expectations continue to develop. As electrified vehicles continue to grow their presence on the road, Experian’s Automotive Market Trends Report: Q3 2025 took a deep dive into this segment and found that 5.5 million electric vehicles (EVs) and 11.7 million hybrids were in operation this quarter. Furthermore, data through the third quarter of this year found that 73.8% of EV owners returning to market replaced their EV with another EV and only 16.5% switched to a gas-powered vehicle. The significant EV loyalty among consumers signals that the ownership experience is delivering on core expectations. While some owners continued to opt for an EV because they’ve grown accustomed to certain conveniences such as charging stations at home or workplace to avoid traditional fueling and the perks of lower maintenance needs, others took advantage of the EV tax credits before they expired at the end of September. However, as these motivations shift, it will be important to monitor how the EV market unfolds over the next six months. Notably, 11.7% of gas-powered vehicle owners replaced their vehicle with a gas-hybrid vehicle this quarter, suggesting that hybrids are acting as an effective bridge toward deeper electrification. In fact, drivers may see hybrids as the ‘happy medium’ vehicle that offers improved fuel efficiency without requiring full reliance on charging infrastructure. Why this matters for the aftermarket As the majority of consumers replace their EVs with another one and some switch their gas-powered vehicle for an electrified one, these trends signal potential long-term commitment to alternative fuel segments. This is important to monitor for aftermarket professionals as the EV service volume continues to grow, requiring different parts and technician training. With consumers increasingly turning to the aftermarket for cost-effective support, professionals who adapt to diverse powertrains will be best positioned to navigate this evolving wave of post-warranty demand. To learn more about EVs and other vehicle market trends, view the full Automotive Market Trends Report: Q3 2025 presentation on demand.

From shifting consumer preferences to aging vehicles reshaping service demand, data from the second quarter of 2025 revealed a dynamic landscape where new and used vehicle registrations grow, and the aftermarket “Sweet Spot” becomes a rich source for service providers. Experian’s Automotive Market Trends Report: Q2 2025 found that light-duty vehicles reached 293.5 million, up from 291.1 million through Q2 2024. This growth can be attributed to the 16.3 million new vehicle registrations and 39.5 million used vehicle ownership changes, demonstrating a healthy turnover in the market. Taking a closer look at the registration trends, new vehicle registrations saw a 7.7% year-over-year increase, reaching 4.2 million through Q2 2025. Meanwhile, used vehicle registrations also slightly increased by 2% from last year, rising to 10.2 million this quarter, as buyers continued to seek pre-owned options amid conversations around affordability. Leveraging aftermarket trends for service opportunities As vehicles age and warranties expire, there is a natural shift to aftermarket services, and the continuous growth in the aftermarket sweet spot shows that consumers are willing to keep their vehicles for longer periods of time, as long as they’re still functional. The aftermarket sweet spot is made up of vehicles aged 6-to-12-years old and are typically out of manufacturer warranty, making them prime candidates for aftermarket services. For instance, 35.5% of all light-duty vehicles on the road fell into this category through Q2 2025, signaling an opportunity for service providers and parts manufacturers. With total vehicle registrations on the rise and more vehicles entering the aftermarket sweet spot, it gives automotive professionals in all stages of the buying journey an opportunity to capitalize on these positive trends and meet consumers where they are needed the most. To learn more about vehicle market trends, view the full Automotive Market Trends Report: Q2 2025 presentation on demand.

In an ever-evolving automotive landscape, where shifting consumer behavior meets fluctuating market dynamics, Experian’s State of the Automotive Finance Market Report: Q2 2025 delivers key insights into how both consumers and professionals are adapting to the changes. This quarter’s report revealed a sharp increase in vehicle refinancing—up nearly 70% from Q2 2024—as consumers capitalized on the more stable rate environment. In fact, after refinancing, the average interest rate went from 10.45% to 8.45%. That shift resulted in their monthly payment dropping by an average of $71. Interestingly, credit unions played a significant role in the refinance surge, increasing their market share from 63.22% last year to 68.33% this quarter, and borrowers who refinanced through credit unions saw their monthly payments decrease by $87 on average. Banks saw a slight dip in their share of the refinancing market year-over-year, going from 22.71% to 21.45%, and borrowers who refinanced through them saved an average of $46 a month. New leaders emerge as the lender market share continues to evolve Taking a deeper dive into the automotive finance market share, banks reclaimed their leading position for total vehicle financing, rising to 27.50% in Q2 2025, from 24.50% in Q2 2024. Meanwhile, captives declined from 30.17% to 26.63% year-over-year, and credit unions slightly increased from 20.35% to 21.04% during the same period. For new vehicles, captives continued to lead at 52.39% this quarter, though it was a drop from 60.74% last year. On the other hand, banks grew from 21.12% to 25.91% and credit unions went from 9.99% to 12.24% in the same time frame. On the used side, banks edged ahead, increasing their share to 28.59% in Q2 2025, from 26.80% last year. Credit unions saw slight growth from 27.59% to 27.63%, while captives declined from 7.83% to 6.40% year-over-year. As affordability remains a key priority, consumers seem to be exploring financing options that offer more favorable terms. While Experian Automotive’s report continues to illustrate the evolving dynamics, these data-driven insights can empower both consumers and industry professionals to make smarter financial decisions. To learn more about automotive finance trends, view the full State of the Automotive Finance Market Report: Q2 2025 presentation on demand.