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Amid interest rates leveling out and some lenders reassessing go-to-market strategies, the automotive finance landscape is experiencing notable shifts in market share. According to Experian’s State of the Automotive Finance Market Report: Q1 2025, banks recouped some of their total finance market share for the first time in several years, reaching 26.6% during the quarter, up from 24.8% a year ago. On the other hand, captives’ total market share declined from 31.3% to 29.8% year-over-year and credit unions experienced a modest increase from 20.2% to 20.6%. Despite the overall market share shifts, captives continue to lead in new vehicle financing at 57.1% in Q1 2025, although down from 62.1% the year prior. Meanwhile, banks increased to 24.1% this quarter, from 20.4% in Q1 2024 and credit unions went from 9.6% to 10.9% during the same period. On the used side, banks and credit unions were grouped much closer together. Banks led the way with 28.4% of the used finance market in Q1 2025, up from 27.9% last year, while credit unions went from 27.7% to 28.2% year-over-year and captives declined from 8.5% to 7.4%. As market share movement continues to be a valuable indicator of shifting strategies and consumer behavior, it’s important for automotive professionals to keep a close eye on these shifts to uncover new opportunities while looking for ways to stay ahead of the rapidly evolving industry. Breaking down the latest finance trends Data in the first quarter of 2025 shows the automotive finance market continues to stabilize as automotive professionals gain clearer visibility into lender behavior and consumer demand. For example, the average loan amount for a new vehicle increased $1,110 year-over-year to $41,720 in Q1 2025. However, the average interest rate dropped from 6.9% to 6.7%, and the average monthly payment went from $737 last year to $745 this quarter. For used vehicles, the average loan amount saw a slight uptick of $90 year-over-year, reaching $26,144 this quarter. Meanwhile, the average interest rate declined from 12.4% last year to 11.9% this quarter and the average monthly payment trended lower at $521, from $524 in Q1 2024. Monitoring and leveraging market share shifts and financing trends can support strategic planning while empowering automotive professionals to anticipate consumer purchasing patterns and tailor conversations more effectively to meet buyers where they are during their car buying journey. To learn more about automotive finance trends, view the full State of the Automotive Finance Market: Q1 2025 presentation on demand.

For financial institutions to achieve success, they need to develop high-performing models with easy access to top-tier data sources. It’s also important to focus on data governance, compliance, and risk management throughout the lending lifecycle. Industry leaders implement advanced analytics and AI solutions to improve their lending decisions, and they also incorporate integrated, efficient feature engineering into their business operations. What’s feature engineering? Feature engineering helps organizations turn raw data into comprehensive model development, following this process: Data collection Data cleaning and transformation Feature engineering Model training and evaluation Decision-making Effectively transforming data into valuable insights depends heavily on creating new custom features to enhance model performance, as well as the quality of the data being used. When data is fragmented or managed poorly, it can lead to increased operational costs, missed revenue opportunities, and compliance risks. Our feature engineering solution: Experian Feature Builder Financial institutions require optimized workflows that can accelerate development while supporting governance and ensuring transparency. Experian’s feature engineering tool, Experian Feature Builder, streamlines custom feature development and deployment across the modeling lifecycle. Providing access to 20+ years of proprietary data, Experian Feature Builder enables organizations to: Break data silos by creating unified access across multiple data types Ensure trust and compliance by embedding audit and lineage tracking at each stage Enable strategic agility with faster and more consistent feature experimentation, testing, and deployment Download our latest e-book to find out more about how Experian’s Feature Builder provides centralized feature development to accelerate time-to-market, enhance compliance, and minimize risk. Download the e-book