Melinda Zabritski, Director of Automotive Credit

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State of the Automotive Finance Market Third Quarter 2010 Melinda Zabritski, Director of Automotive Credit 2010 Experian Information Solutions, Inc. All rights reserved.

1 State of the Automotive Finance Market Third Quarter 2010 Melinda Zabritski, Director of Automotive Credit 2010 Experian Information Solutions, Inc. All rights reserved. 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.

Data Overview Third quarter 2010 Automotive Finance Market Overview All open automotive loans by risk tier Automotive loan delinquencies Source: Experian-Oliver Wyman Market Intelligence Reports

2 Data Overview Third quarter 2010 Automotive Finance Market Overview All open automotive loans by risk tier Automotive loan delinquencies Source: Experian-Oliver Wyman Market Intelligence Reports Visit Automotive Financing in third quarter 2010 New versus Used vehicles Top Lender report Category Loan characteristics, now including Loan-to-Value Risk Tiers Scorex PLUS SM VantageScore Super Prime Prime Nonprime Subprime Deep Subprime < Source: Experian Automotive National Vehicle Database sourced from DMV title registrations and NADA Used Car Guides. Visit: Experian Information Solutions, Inc. All rights reserved. 2

financing is changing Questions and answers 2010

3 Session overview Automotive market overview with a look at consumer delinquency How new and used financing is changing Questions and answers 2010 Experian Information Solutions, Inc. All rights reserved. 3

5 Automotive Finance Market How has the market been changing? Risk Distribution of Open Automotive Loans 4% Change in Risk Distribution from Q % 3.05% 8.8% 12.9% 38.2% 2% -2% -4% Super Prime 1.67% 0.02% Prime Nonprime Subprime Deep Subprime 15.5% -6% -8% % -12% Super Prime Prime Nonprime Subprime Deep Subprime Source: Experian-Oliver Wyman Market Intelligence Reports -14% -16% % 2010 Experian Information Solutions, Inc. All rights reserved. 5

6 Total Automotive Balance Who holds the open loans? Total Outstanding Automotive Balance -$38B $800 $700 Billions Billions $- Change in Balance from 3Q2009 $(2) Bank Captive Credit Union Finance/ Other $77 $73 $600 $(4) $150 $144 $500 $(6) $(4) $203 $190 $400 $300 $(8) $(6) $200 $(10) $240 $225 $100 $(12) Q Q Bank Captive Auto Credit Union Finance/Other YOY Change Source: Experian-Oliver Wyman Market Intelligence Reports $- $(14) $(16) $(15) $(13) 2010 Experian Information Solutions, Inc. All rights reserved. 6

7 Average Age of Automotive Loans Are consumers holding onto loans longer? Average Loan Age by Lender Type (Months) Average Loan Age by Risk Segment (Months) All Banks Captive Auto Credit Union Finance/Other TOTAL 12 Super Prime Prime Nonprime Subprime Deep Subprime YOY Change Source: Experian-Oliver Wyman Market Intelligence Reports 2010 Experian Information Solutions, Inc. All rights reserved. 7

8 Recent Automotive Delinquency: 30 Day Delinquency How are automotive loans performing? 30 Day Delinquency -4.33% Total Balance of 30 Day Delinquent Loans 7% 6% 5% % -7.68% 6.49% 6.21% -8.43% $5,272 -$4.5 billion $25,000 $20,000 Millions 4% 3% 3.42% 3.04% 3.16% 2.59% -2.24% 3.27% 2.99% $2,438 $4,649 $6,788 $2,233 $15,000 $10,000 2% 1.68% 1.64% $5,266 1% $7,114 $4,935 $5,000 Banks Captive Auto Credit Union Finance/Other TOTAL Q Q $- YOY Change Source: Experian-Oliver Wyman Market Intelligence Reports Bank Captive Auto Credit Union Finance/Other 2010 Experian Information Solutions, Inc. All rights reserved. 8

9 Recent Automotive Delinquency: 60 Day Delinquency How are automotive loans performing? Day Delinquency % Total Balance of 60 Day Delinquent Loans $1,790 -$1.9 billion $7,000 $6,000 $5,000 Millions % % % 0.87% 0.74% 0.67% 0.59% 0.48% % % 0.77% $678 $1,504 $2,032 $1,402 $509 $965 $1,199 $4,000 $3,000 $2,000 $1, Bank Captive Auto Credit Union Finance/Other TOTAL Q Q $- YOY Change Source: Experian-Oliver Wyman Market Intelligence Reports Bank Captive Auto Credit Union Finance/Other 2010 Experian Information Solutions, Inc. All rights reserved. 9

10 Outside of Prime: 60 Day Delinquency Rate Which states lead in 60 day delinquency? AK = 0.8 HI = 1.76% Source: Experian-Oliver Wyman Market Intelligence Reports 2010 Experian Information Solutions, Inc. All rights reserved. 10

11 Recent Automotive Repossessions How have repossessions changed? Reposession Rates Average Charge-Off Amount % $12, % 2.44% $11,000 $10,000 $9,000 -$1,497 -$1,248 $9,228 $8,802 -$463 $10,982 $9,892 -$3,363 -$2, % -11.1% -5. $8,000 $7,731 $7,554 $8,202 $7,740 $7,619 $7, % 0.61% 0.48% 0.54% 0.36% 0.18% 0.19% % $7,000 $6, Bank Captive Auto Credit Union Finance/Other TOTAL $5,000 Bank Captive Auto Credit Union Finance/Other TOTAL YOY Change Source: Experian-Oliver Wyman Market Intelligence Reports 2010 Experian Information Solutions, Inc. All rights reserved. 11

Automotive financing in the third quarter 2010 2010 Experian

13 Market Snapshot on Vehicle Financing How has financing on vehicles changed? 6.5% Financing by Vehicle Type Used 60.95% New 39.05% -8.7% Financing by Risk Segment 33.99% 36.42% 40.72% 37.24% 36.71% 66.01% 63.58% 59.28% 62.76% 63.29% 3Q2009 4Q2009 1Q2010 2Q2010 3Q % Average Credit Scores Prime Subprime Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q YOY Change Source: Experian Automotive Average New Score Average Used Score 2010 Experian Information Solutions, Inc. All rights reserved. 13

14 Quarterly Financing for New Vehicles How has credit changed for new financing? 10 9 New Vehicle Financing 1.46% 1.44% 1.38% 1.48% 1.59% 5.66% % 6.16% 6.61% 9.79% 9.75% 9.81% 10.57% 10.86% 12.7% 2 Change in Risk Distribution from 3Q % % 13.35% 13.25% 13.55% % % 5-2.6% 1 8.7% % 69.86% 69.89% 68.24% 67.14% 5% 4.5% 2 1 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 Deep Subprime Subprime Nonprime Prime Super Prime Super Prime Prime Nonprime Subprime Deep Subprime YOY Change Source: Experian Automotive -5% -3.9% 2010 Experian Information Solutions, Inc. All rights reserved. 14

15 Quarterly Financing for Used Vehicles How has credit changed for used financing? 10 Used Vehicle Financing Change in Risk Distribution from Q % % 13.92% 13.86% 13.35% 13.27% 24.19% 15.29% 13.19% 12.21% 18.86% 17.62% 15.62% 15.61% 14.45% 14.79% 13.32% 13.65% 2.69% 12% 1 8% 6% 4% 2% % 2.2% % 38.82% 35.12% 37.75% 38.33% -2.36% -2% Deep Subprime Subprime Nonprime Prime Super Prime 1 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010-4% -6% -5.5% -3.9% Super Prime Prime Nonprime Subprime Deep Subprime YOY Change Source: Experian Automotive -8% 2010 Experian Information Solutions, Inc. All rights reserved. 15

Automotive Finance by Lender Type What lenders are gaining share?

41% Source: Experian Automotive Market Share by Lender 3.5% 8.0-5.4% 26.39% 8.

7% 3 2 16.2% 33.43% 1-2.8% -9.2% -1-2 9.96% 5.26% -30.1%-3 0.34% -41.4% 0.

91% Market Share Used Financing -10.7% 10.95% 6.8% Change in Share 3 27.

16 Automotive Finance by Lender Type What lenders are gaining share? 4 35% 3 25% 2 15% 1 5% 34.41% Source: Experian Automotive Market Share by Lender 3.5% % 26.39% 8.1% 18.64% Bank BHPH Captive Credit Union Market Share 8.24% -18.9% Finance 31.1% Change in Share 4.3 Other % % 3 25% 2 15% 1 5% New Financing % % 33.43% 1-2.8% -9.2% % 5.26% -30.1% % -41.4% 0.52% -4-5 Bank BHPH Captive Credit Union Finance Other 35.05% 8.1% 12.91% Market Share Used Financing -10.7% 10.95% 6.8% Change in Share % 25% % 15% 1 5% 10.16% 6.73% -5% -11.7% -9.9%-1-15% Bank BHPH Captive Credit Union Finance Other Market Share Change in Share 2010 Experian Information Solutions, Inc. All rights reserved. 16

17 Top 20 Lenders by Market Share Who gained or lost share? Top 20 Lenders: Total Loan 7% 6% 5% 5.79% 5.47% % of All Financing 198.1% 256.3% 176.9% % 3.37% 105.3% 15 3% 2.67% 10 2% 1% -19.2% -12.6% 8.7% 9.9% 26.5% -5.9% 39.1% 2.04% 1.92% 1.66% 27.3% 1.58% 1.56% 12.3% 1.28% 1.25% 1.17% 1.14% 1.12% 1.08% -9.3% 22.1% 15.6% % 0.92% % Q2010 Change in Share from 3Q09 Source: Experian Automotive 2010 Experian Information Solutions, Inc. All rights reserved. 17

Top 20 New Lenders by Market Share Who gained or lost share on New Vehicle Financing?

15 6% 10 4% 2% 30.2% 15.4% -12.8% -23.5% 4.2% 30.7% -18.5% -23.5% 17.2% 26.8% 6.2% 24.

6 2.39% 2.08% 1.88% 1.66% 1.63% 1.6 1.32% 1.26% 1.09% 0.

18 Top 20 New Lenders by Market Share Who gained or lost share on New Vehicle Financing? Top 20 New Lenders by Market Share 12% 233.9% % of New Financing 20 8% % 10 4% 2% 30.2% 15.4% -12.8% -23.5% 4.2% 30.7% -18.5% -23.5% 17.2% 26.8% 6.2% 24.8% 9.4% % -15.4% % 9.69% 8.92% 8.47% 7.39% 4.38% 4.14% 3.03% 2.97% % 2.08% 1.88% 1.66% 1.63% % 1.26% 1.09% 0.98% -5 3Q2010 Share Change in Share from 3Q09 Source: Experian Automotive 2010 Experian Information Solutions, Inc. All rights reserved. 18

19 Top 20 Used Lenders by Market Share Who gained or lost share on Used Vehicle Financing? 8% 7% 6% 5% Top 20 Used Auto Lenders by Market Share 204.1% % of Used Financing % 3% 2% 1% 80.6% 53.5% 57.3% 42.6% 37.9% 19.6% % -6.5% 2.1% 8.6% 13.9% 19.8% 18.8% 0.9% % -15.4% 6.84% % 2.84% 1.92% 1.54% 1.49% 1.45% % 1.26% 1.23% 1.15% 1.12% 1.07% 1.04% 0.99% 0.82% 0.81% Q2010 Share Change in Share from 3Q09 Source: Experian Automotive 2010 Experian Information Solutions, Inc. All rights reserved. 19

20 Vehicle Financing How has financing changed? $30,000 $25,000 $20,000 Average Amount Financed $2,530 $25,273 $22,743 $977 $16,706 $15,729 $28,000 $26,000 $24,000 $22,000 $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 Average Amount Financed: New Vehicles $26,579 $25,793 $25,107 $23,981 $23,722 $22,963 $22,655 $21,866 $21,576 $20,342 Deep Subprime Subprime Nonprime Prime Super Prime $15,000 $10,000 $5,000 $19,000 $17,000 $15,000 $13,000 Average Amount Financed: Used Vehicles $18,044 $17,369 $16,999 $15,968 $16,238 $14,784 $14,867 $13,652 $12,876 $11,797 $ New Used $11,000 $9,000 $7,000 $5,000 Deep Subprime Subprime Nonprime Prime Super Prime YOY Change Source: Experian Automotive 2010 Experian Information Solutions, Inc. All rights reserved. 20

21 Vehicle Values and Loan-to-Value How do the lenders and risk segments compare? Average LTV by Risk Segment Average LTV by Lender Type % % % % % % % % % % % % % % % % % % Deep Subprime Subprime Nonprime Prime Super Prime 8 Market Totals Bank Credit Union Captive Finance Buy Here/Pay Here Average New LTV Average Used LTV Average New LTV Average Used LTV Source: Experian Automotive and NADA Used Car Guides 2010 Experian Information Solutions, Inc. All rights reserved. 21

22 Vehicle Payments How have monthly payments changed? $500 $450 Average Monthly Payment $30 $452 $422 $500 $480 $460 $440 $420 Average Monthly Payment: New Vehicles $457 $451 $455 $456 $431 $428 $424 $424 $421 $452 $400 $12 $400 Deep Subprime Subprime Nonprime Prime Super Prime $350 $331 $343 Average Monthly Payment Used Vehicles $400 $300 $250 New Used $380 $360 $340 $320 $300 $357 $352 $343 $334 $320 $343 $334 $335 $334 $325 Deep Subprime Subprime Nonprime Prime Super Prime YOY Change Source: Experian Automotive 2010 Experian Information Solutions, Inc. All rights reserved. 22

23 Vehicle Loan Terms How have terms changed? 72 Average Term Average Term: New Vehicles Deep Subprime Subprime Nonprime Prime Super Prime Average Term: Used Vehicles 36 New Used Deep Subprime Subprime Nonprime Prime Super Prime YOY Change Source: Experian Automotive 2010 Experian Information Solutions, Inc. All rights reserved. 23

24 Vehicle Loan Rate How have rates changed? 1 9% 8% 7% 6% 5% Average Rate 9.17% -79 bps 5.77% 4.98% Average Rate: New Vehicles -34 bps 16% 14.02% 13.54% 14% 11.44% 12% 10.45% 8.83% % 8% 6.94% 6% 4% 2% 6.24% % Deep Subprime Subprime Nonprime Prime Super Prime 4% Average Rate: Used Vehicles 3% 2% 1% New Used 2 15% 1 5% 17.81% 16.25% 14.71% 14.26% 10.66% 10.18% 8.33% 7.44% 6.54% 5.49% Deep Subprime Subprime Nonprime Prime Super Prime YOY Change Source: Experian Automotive 2010 Experian Information Solutions, Inc. All rights reserved. 24

25 Average Rates by LTV How do rates and scores vary by LTV? 10.5% 9.5% 8.5% 7.5% 6.5% 5.5% 4.5% 6.93% 5.02% 6.46% 6.48% 6.62% 6.75% 7.06% 7.32% 7.64% 4.45% 4.33% 4.35% 4.41% 4.61% 4.83% 4.91% 5.01% Average Rate by LTV 7.95% 8.24% 8.62% 9.01% 9.42% 9.68% 9.85% 10.08% 9.79% % 5.14% 5.28% 5.34% 5.46% % 5.62% 5.63% 5.62% 5.54% 5.45% 3.5% 2.5% Average New Rate Average Used Rate Source: Experian Automotive and NADA Used Car Guides 2010 Experian Information Solutions, Inc. All rights reserved. 25

26 In Summary Overall loan portfolios are strong with highest risk segments decreasing and improved delinquencies Originations showing signs of loosening as subprime experiences first increase since 2007 Used financing still decreasing year-over-year in highest risk tier New financing increased across all segments except super prime Finance companies experienced greatest growth trend with captives gaining market share Finance companies carry highest LTVs Consumer loans grew by $1,401 overall with payments and terms also increasing Rates continue to adjust in the higher risk used loans 2010 Experian Information Solutions, Inc. All rights reserved. 26

Mark your calendars Q4 2010 Automotive Credit Trends Briefing February

1010 Experian Information Solutions, Inc.

Melinda Zabritski, Director of Automotive Credit

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