The fourth quarter highlighted still-elevated auto delinquencies, growing lease share and competitive market conditions.  

Credit performance worsened in Q4, with 60-day delinquencies up 4 basis points year over year to 1.16% of auto loan balances, according to Experian. However, the rate of increase for past-due balances has slowed compared with a year ago and in 2022. 

“We've been steadily increasing for the past several years on that 60-day delinquency standpoint,” Melinda Zabritski, head of automotive financial insights at Experian, told Auto Finance News. “While it is at one of the peaks, it's unlike what we saw with the recession, where delinquency pretty much came out of nowhere. I wouldn't say anyone has been surprised with the increased levels of delinquency.” 

Leasing is also picking up as consumers look for lower monthly payments and EVs drive higher share. Lease share industrywide rose to 24.5% in Q4 from 22.6% a year prior, according to Experian. Indirect auto lessor Cal Automotive, for one, is expanding in Florida as lease penetration rises in tandem with high interest rates and monthly payments. 

Meanwhile, banks picked up market share in Q4 while credit unions scaled bank and captives continued to lead, largely driven by incentives, Zabritski said.  

During this special episode of the “Weekly Wrap,” podcast, Auto Finance News Editor Amanda Harris and Experian’s Zabritski discuss trends in affordability, pricing, auto tariffs, EVs and credit performance.