Melinda Zabritski, Director of Automotive Credit

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State of the Automotive Finance Market First Quarter 2012 Melinda Zabritski, Director of Automotive Credit Experian and the marks used herein are service marks or registered trademarks of Experian

1 State of the Automotive Finance Market First Quarter 2012 Melinda Zabritski, Director of Automotive Credit Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein may be the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian Information Solutions, Inc.

2 Today s presentation Questions- please enter questions in the Webinar tool and include slide number if possible Presentation- an will be sent out later today with a link to download the presentation Melinda Zabritski Director of Automotive Credit 2

3 Session overview Market overview Overall automotive finance market Credit distributions Loan Balances Consumer delinquency VantageScore Source: Experian-Oliver Wyman Market Intelligence Report Visit: marketintelligencereports.com First quarter originations Changes in new and used financing Originations by lender type and risk segmentation Loan and lease penetration Loan characteristics NADA values and LTV Scorex PLUS SM Source: Experian Automotive North American Vehicle Database sourced from DMV title registrations and NADA Used Car Guides Visit: autocount.com Category Super prime Score ranges Scorex PLUS SM Vantage Score Prime Nonprime Subprime Deep subprime <

4 Overall Automotive Finance Market Automotive market overview with a look at consumer delinquency 4

Automotive finance market How has the market been changing? 10 9 8 7 6 5 4 3 2 1 Risk distribution of open loans 39.4% 39.7% 25.1% 25.4% 15.6% 15.7% 8.7% 8.5% 11.1% 10.

5 Automotive finance market How has the market been changing? Risk distribution of open loans 39.4% 39.7% 25.1% 25.4% 15.6% 15.7% 8.7% 8.5% 11.1% 10.7% -8% Deep subprime Subprime Nonprime Prime Super prime Source: Experian-Oliver Wyman Market Intelligence Reports 4% 2% -2% -4% -6% YOY change in risk distribution -0.94% 1.22% 0.95% 1.97% Deep Subprime Nonprime Prime Super subprime prime 5

6 Billions Billions Total automotive balance Who holds the open loans? Total outstanding loan balance $26.8B $700 $14 YOY change in balance $13 $600 $77 $81 $12 $500 $142 $144 $10 $400 $300 $200 $100 $193 $200 $225 $238 $8 $6 $4 $2 $7 $2 $4 $- Bank Captive Credit Union Finance YOY Change Source: Experian-Oliver Wyman Market Intelligence Reports $- Bank Captive Credit Union Finance 6

Recent automotive delinquency: 30 day delinquency How are delinquency rates changing? 6% 5% Overall 19 bps improvement 4.33% 4.83% 4.62% 4% 9.8 6.42% 7.58% 3% 2% 2.

7 Recent automotive delinquency: 30 day delinquency How are delinquency rates changing? 6% 5% Overall 19 bps improvement 4.33% 4.83% 4.62% 4% % 7.58% 3% 2% 2.25% 2.03% 2.67% % 1.42% 1.24% 2.52% 2.33% 1% Bank Captive Credit Union Finance Total YOY Change Source: Experian-Oliver Wyman Market Intelligence Reports 7

Millions Millions Recent automotive delinquency: 30 day delinquency What s at risk? Balance of 30-day delinquent loans YOY change in 30-day balance $16,000 $14,000 $1.

8 Millions Millions Recent automotive delinquency: 30 day delinquency What s at risk? Balance of 30-day delinquent loans YOY change in 30-day balance $16,000 $14,000 $1.2B $- Bank Captive Credit Union Finance $12,000 $10,000 $8,000 $3,612 $1,773 $3,465 $1,463 $(100) $(200) $(204) $(146) $6,000 $4,000 $4,156 $3,951 $(300) $(400) $(311) $2,000 $- $3,960 $3,331 $(500) $(600) Bank Captive Credit Union Finance $(629) YOY Change Source: Experian-Oliver Wyman Market Intelligence Reports $(700) 8

9 Recent automotive delinquency: 60 day delinquency How are delinquency rates changing? 1.8% 1.6% 1.4% 1.2% Overall 8 bps improvement 7.94% 1.58% 1.46% % 12.17% 0.8% 0.6% 0.4% % 20.27% % 0.35% % 0.57% 0.2% 0. Bank Captive Credit Union Finance Total YOY Change Source: Experian-Oliver Wyman Market Intelligence Reports 9

10 Millions Millions Recent automotive delinquency: 60 day delinquency What s at risk? Balance of 60-day delinquent loans YOY change in 60-day balance $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- $1,047 $396 $734 $972 $314 $556 $934 $793 Bank Captive Credit Union Finance YOY Change Source: Experian-Oliver Wyman Market Intelligence Reports $476M $- $(20) $(40) $(60) $(80) $(100) $(120) $(140) $(160) $(180) $(200) Bank $(141) Captive $(178) Credit Union $(82) Finance $(75) 10

Recent automotive delinquency: quarterly repossession How are repo rates changing? 3. 2.5% Overall 25 bps improvement 2.57% 54.5% 2. 1.5% 1. 0.5% 14. 0.35% 0.3 20.

11 Recent automotive delinquency: quarterly repossession How are repo rates changing? % Overall 25 bps improvement 2.57% 54.5% % % % % 0.52% 0.41% 11.1% % 1.17% 37.1% 0.68% 0.43% 0. Bank Captive Credit Union Finance Total YOY Change Source: Experian-Oliver Wyman Market Intelligence Reports 11

12 Average charge-off amount How have charge-offs changed? $7,400 $7,200 $7,000 $6,800 $6,600 $6,729 $527 $206 $7,223 $7,232 $7,017 $649 $6,583 $184 $320 $7,082 $7,059 $6,898 $6,739 $6,400 $6,200 $6,202 $6,000 $5,800 $5,600 YOY Change Source: Experian-Oliver Wyman Market Intelligence Reports Bank Captive Credit Union Finance Total 12

13 New & Used Originations Automotive financing in the first quarter

14 Automotive market by transaction type How are consumers purchasing vehicles? No lender on title 51.2% 49.1% % New Used Overall financing 11.06% 10.56% 88.94% 89.44% Total Loan Total Lease Leasing by type 3.49% 3.78% 96.51% 96.22% New lease Used lease 3 25% 2 15% 1 5% New lease share of new financing 26.74% 24.05% % 19.56% Q Q Q Source: Experian Automotive 14

Top new lease providers Who s dominating in leasing? 18% 16% 16.5% 76.21% 9 8 14% 12% 1 43.03% 11.4% 11.4% 10.8% 46.19% 9. 52.95% 52.41% 56.92% 7 6 5 8% 6% 4% 31.05% 31.23% 21.61% 7.5% 7.3% 6. 5.6% 3.

15 Top new lease providers Who s dominating in leasing? 18% 16% 16.5% 76.21% % 12% % 11.4% 11.4% 10.8% 46.19% % 52.41% 56.92% % 6% 4% 31.05% 31.23% 21.61% 7.5% 7.3% % % 11.54% 1 AMERICAN HONDA FINANCE TOYOTA FINANCIAL SERVICES FORD MOTOR CREDIT NISSAN INFINITI FINANCIAL SERVICES ALLY HYUNDAI CAPITAL AMERICA VW CREDIT INC MERCEDES BENZ FINANCIAL BMW BANK OF NORTH AMERICA CHASE AUTO FINANCE Share of new lease market % of new financing as lease Source: Experian Automotive 15

16 Market snapshot on vehicle loan financing What and where are consumers financing? Loans by vehicle type Used 64.88% New 35.12% Current + 5 model years 55.23% -17.2% 45.74% Used financing by dealer type Independent Franchise 3 2 YOY Change Source: Experian Automotive 49.1% 50.9% 1 16

17 Market snapshot on vehicle financing How has financing on vehicles changed? Q YOY Change Source: Experian Automotive Average loan scores by vehicle type Q New Q Used Q Q Risk distribution of auto loans 53.78% 57.63% 59.28% 58.11% 55.62% 46.22% 42.37% 40.72% 41.89% 44.38% Q Q Subprime Q Prime Q Q % 5.9% 17

2% 11.5% 11.5% 5 4 3 2 1 YOY Change Source: Experian Automotive 13.66% 14.25% 11.26% 12.56% 7.53% 2.0 8.4 2.

18 Quarterly financing for new vehicles How has credit changed for new financing? Risk distribution of new loans YOY change in new financing 10 14% % 62.59% % 1 8% 10.2% 11.5% 11.5% YOY Change Source: Experian Automotive 13.66% 14.25% 11.26% 12.56% 7.53% Deep subprime Nonprime Super prime Subprime Prime 11.4% 6% 4% 2% -2% -4% -6% Deep subprime Subprime Nonprime 4.3% Prime Super prime -4.5% 18

19 Quarterly financing for used vehicles How has credit changed for used financing? Risk distribution of used loans YOY change in used financing 10 15% % 30.45% 12.47% 12.78% -4.85% 1 8.1% % 15.92% 17.41% 18.82% 22.81% 22.03% 4.04% 5% Deep subprime Subprime Nonprime 2.5% Prime Super prime YOY Change Source: Experian Automotive Deep subprime Subprime Nonprime Prime Super prime -5% % -7.6% 19

Automotive finance by lender type What lenders are gaining share?

78% 15% 1 5% 6 5 4 3 2 1 47.85% 6.6% New loan market share -68.7% 0.13% 36.01% -8.

47% Finance YOY change in share 4 2-2 -4-6 -8 15% 1 5% Bank 11.44% -12.7% -11.

8% Finance -5% YOY change in share -1-15% 4 3 2 1 36.07% 8.

20 Automotive finance by lender type What lenders are gaining share? 45% 4 35% 3 25% 2 Automotive loan market share 40.21% 7.5% 10.5% 16.68% 16.89% 14.78% 15% 1 5% % 6.6% New loan market share -68.7% 0.13% 36.01% -8.7% 30.4% 11.54% Bank BHPH Captive Credit Union Market share -29.9% 4.47% Finance YOY change in share % 1 5% Bank 11.44% -12.7% -11.5% Market share BHPH Captive Credit Union -3.8% Finance -5% YOY change in share -1-15% % 8.5% Used loan market share 17.56% -12.8% 6.21% % Bank BHPH Captive Credit Union Market share 19.79% 20.37% 0.2% Finance YOY change in share 1 5% -5% -1-15% -2 Source: Experian Automotive 20

Risk distribution by lender type How have the lenders

09% 6.14% 3.89% 7.7 16.69% 58.65% 47.76% 5.74% 3.39% 11.

22% 5 4 3 2 1 15.55% 18.3 65.59% 14.96% 15.59% 14.84% 18.

3 Bank BHPH Captive Credit Union Deep subprime Subprime

21 Risk distribution by lender type How have the lenders shifted? Risk distribution of market share 52.09% 6.14% 3.89% % 58.65% 47.76% 5.74% 3.39% 11.45% 35.28% 25% 2 YOY change in subprime financing 21.22% % % 14.96% 15.59% 14.84% 18.35% 12.77% 9.28% 11.29% % 4.3 Bank BHPH Captive Credit Union Deep subprime Subprime Nonprime Prime Super prime 44.13% Finance 15% 1 5% 3.52% 14.27% 6.76% Bank BHPH Captive Credit Union 2.09% Finance 21

9% -6.4% 1.78% 1.67% 1.64% 1.43% 1.27% -18.4% 1.21% 1.09% 1.06% 0.96% 0.94% -26.5% -22.9% -8.6% 0.88% -8.

22 Top 20 lenders by market share Who gained or lost share? 7% 6% 5% 4% 3% 2% 1% 6.39% 5.71% 4.85% 261% 48.43% of All Financing 101.5% 4.27% 4.09% % 2.92% 13.1% % 17.4% % 4.1% % 2.9% -6.4% 1.78% 1.67% 1.64% 1.43% 1.27% -18.4% 1.21% 1.09% 1.06% 0.96% 0.94% -26.5% -22.9% -8.6% 0.88% -8.2% 0.87% -6.5% -21.8% Q Share YOY change in share Source: Experian Automotive 22

Top 20 new lenders by market share Who gained or lost new loan share? 499% 12% 1 8% 6% 4% 2% 10.52% -39.7% 8.17% 8.09% 7.36% 7.06% -13.6% -0.6% 21.7% 75.25% of New Financing -18.8% 86.2% 4.44% 4.

23 Top 20 new lenders by market share Who gained or lost new loan share? 499% 12% 1 8% 6% 4% 2% 10.52% -39.7% 8.17% 8.09% 7.36% 7.06% -13.6% -0.6% 21.7% 75.25% of New Financing -18.8% 86.2% 4.44% 4.06% % 149.9% 141.1% 31.2% % 6.4% 2.35% 2.15% 2.13% % 1.56% 1.55% -17.5% 1.41% 1.38% 1.37% 1.31% -12.3% -3.4% -18.5% -32.1% Q Share YOY change in share Source: Experian Automotive 23

Top 20 used lenders by market share Who gained or lost

7% 4.16% 3.91% 5.5% 11.6% 8.3% 3.5 5.1% 25.4% 16 16.

17% -4.2% -6.4% 1.67% 1.64% -13. -12.1% -25.3% 1.36% 1.

24 Top 20 used lenders by market share Who gained or lost used loan share? 7% 6% 5% 4% 3% 2% 1% 6.63% -8.1% 28.7% 4.16% 3.91% 5.5% 11.6% 8.3% % 25.4% % 19.1% 37.78% of Used Financing -0.2% -11.9% 2.33% 2.17% -4.2% -6.4% 1.67% 1.64% % -25.3% 1.36% 1.31% 1.29% -25.2% 1.15% 1.12% 0.89% 0.89% 0.86% 0.82% 0.74% 0.68% 0.65% -35.9% 6.7% Q Share YOY change in share Source: Experian Automotive 24

25 Vehicle financing How has financing changed? Average amount financed Average new amount financed $30,000 $25,000 $25,406 $589 $25,995 $411 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $21,861 $23,118 $24,120 $25,143 $26,801 $27,399 $26,140 $26,845 $25,217 $25,721 $20,000 $15,000 $16,639 $17,050 $ Deep subprime Subprime Nonprime Prime Super prime $10,000 $5,000 $20,000 $15,000 $10,000 Average used amount financed $18,128 $18,878 $16,793 $15,331 $13,177 $17,529 $18,296 $16,136 $14,824 $12,829 $ YOY Change Source: Experian Automotive New Used $5,000 $ Deep subprime Subprime Nonprime Prime Super prime 25

Loan-to-Value by lender type How do the lenders compare? 16 14 129.4 128.

2 8 6 4 2 Average LTV by lender Bank Captive Credit Union Average LTV new

92% Finance Market Totals Average LTV used 600 500 400 300 200 100 - (100)

26 Loan-to-Value by lender type How do the lenders compare? % % % % % Average LTV by lender Bank Captive Credit Union Average LTV new Source: Experian Automotive and NADA Used Car Guides % Finance Market Totals Average LTV used (100) (200) (300) YOY change in LTV (bps) Bank Captive (13) (36) (78) Credit Union (1) Finance (171) (239) Market Totals (16) 26

Loan-to-Value by risk segment How do the risk segments compare? 16 14 145.52% 137.18% 133.18% 128.73% 122.34% 124.08% 116.76% 12 122.99% 117.85% 10 101.

27 Loan-to-Value by risk segment How do the risk segments compare? % % % % % % % % % % Average LTV by risk segment Deep Subprime Nonprime Prime subprime Average LTV new Super prime Average LTV used (100) (200) (300) YOY change in LTV (bps) 344 Deep subprime (223) 249 Subprime (55) Nonprime Prime (90) Super prime (152) 27

28 Average loan payments How have payments changed? $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $ Average monthly payment $460 YOY Change Source: Experian Automotive New $1 $461 $343 Used $3 $346 $475 $470 $465 $460 $455 $450 $445 $440 $435 $360 $355 $350 $345 $340 $335 $330 $325 $320 $450 $467 Deep subprime $351 $350 Average new payment $471 $464 $462 $460 $458 $459 $461 $461 Subprime Nonprime Prime Super prime $356 $357 Deep subprime Average used payment $339 $333 $335 $336 $345 $345 Subprime Nonprime Prime Super prime 28

29 Average loan terms How have terms changed? Average loan term Average new term 72 1 mo mo Deep subprime Subprime Nonprime Prime Super prime Average used term New YOY Change Source: Experian Automotive Used Deep subprime Subprime Nonprime Prime Super prime 29

30 Distribution of loan term How have loan terms changed? New financing by term Used financing by term 45% 4 35% 3 25% 2 15% 1 5% 42.59% 15.4% 29.56% 2.6% 0.2% % % 4.77% 2 15% 1 5% -5% % 3 25% 2 15% 1 5% 21.9% 35.03% 29.89% 5.3% 14.77% -0.1% 8.21% 9.13% -8.8% -3.4% 25% 2 15% 1 5% -5% % % % of new financing by term % of new financing by term YOY change in term YOY change in term 30

02% 16% 14% 12% 1 8% 6% 4% 2% 2 15% 1 5% 13.57% 12.89% Deep subprime 17.85% 17.9 Deep subprime 10.

31 Average loan rate How have rates changed? 1 9% 8% 7% 6% 5% 4% 3% 2% 1% 4.83% New YOY Change Source: Experian Automotive Average loan rate 27 bps 4.56% 9.08% Used 6 bps 9.02% 16% 14% 12% 1 8% 6% 4% 2% 2 15% 1 5% 13.57% 12.89% Deep subprime 17.85% 17.9 Deep subprime 10.38% Average new rate % 6.46% 4.52% 4.95% 3.64% 3.21% Subprime Nonprime Prime Super prime 14.64% Average used rate 14.42% 9.88% 9.53% 7.04% 6.44% 5.06% 4.4 Subprime Nonprime Prime Super prime 31

32 In summary Overall, open portfolios continue to be strong with increasing total balances (up nearly $27 billion) Historic lows for delinquencies Credit continues to loosen on originations Subprime share financing has increased (11% on New; 4% on Used) Average scores continue to decrease Finance amounts increased for both new and used Terms increasing among all risk segments Long term loans growing Rates decreasing for both new and used However, despite loosening credit and extended terms, LTVs are down from previous year 32

33 Reminder Don t forget to fill out survey! An with a link to the presentation will be sent to all attendees later today. Thank you for attending the presentation. 33

34 Experian Public. 34

State of the Automotive Finance Market Fourth Quarter 2013

State of the Automotive Finance Market Fourth Quarter 2013 Melinda Zabritski Sr. Director, Experian Automotive Experian and the marks used herein are service marks or registered trademarks of Experian