New Experian Automotive Report Shows Nearly One-Third of Automotive Loan Terms Are Longer Than Six Years
Refinancing trimmed an average of 2.2% off interest rates and saved consumers an average of
A similar pattern was observed in the used vehicle market. The percentage of used vehicles with loan terms more than six years hit 31.54%, up from 28.60% in Q1 2025. Meanwhile, used vehicles with loan terms more than 85 months grew to 1.40% in Q1 2026, from 1.32% the year prior.
“Affordability continues to shape financing decisions across the automotive market,” said
In the first quarter of 2026, the average loan amount for a new vehicle increased
On the used side, the average loan amount saw an uptick of
Interestingly, while the average monthly payment for new vehicles continues to rise, nearly 20% of new vehicles had an average monthly payment less than
Automotive refinancing supports consumer affordability and lender performance
As interest rates steadily decline, refinancing has increasingly become an option for consumers looking to ease monthly payment pressures, as well as lenders hoping to find ways to offer more competitive rates.
In Q1 2026, on average, consumers trimmed 2.2% off their interest rate after refinancing. The average refinanced interest rate was 8.05%, down from 10.29%. This lowered the average monthly payment by
Interestingly, credit unions accounted for the largest share of automotive refinancing at 63.43%, from 62.31% in Q1 2025, compared to banks going from 23.51% to 22.59%. In addition, the payment difference when refinancing with credit unions was
Subprime segment continues to grow as credit access increases
During the first quarter of 2026, subprime borrowers made up 15.75% of total vehicle financing, an increase from 14.40% last year.
For new vehicle financing, the subprime market grew to 6.88% in Q1 2026, from 5.61% in Q1 2025. In used vehicle financing, the subprime market increased from 19.36% last year to 20.60% this quarter.
“While consumers are benefiting from improved refinancing conditions, we’re also seeing broader financing accessibility emerge,” Zabritski continued. “There continues to be increased momentum within the subprime segment as financing options expand across the automotive finance market.”
Additional findings for Q1 2026:
- The average loan term for a new vehicle was 69.48 months this quarter, and the average loan term for a used vehicle was 67.73 months.
- Banks accounted for 28.42% of total market share in Q1 2026, followed by captives (26.83%), and credit unions (20.09%).
- Thirty-day delinquencies rose to 2.00% in Q1 2026, from 1.95% in Q1 2025, while 60-day delinquencies increased from 0.83% to 0.86% year-over-year.
- New electric vehicle financing declined from 10.93% last year to 6.23% this quarter, and hybrid vehicles increased from 12.08% to 14.90%.
To learn more, watch the entireState of the Automotive Finance Market Report: Q1 2026 presentation on demand.
About Experian
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Source: Experian
