CARY, N.C. –

In the State of the Automotive Finance Market report released Wednesday by Experian Automotive, Melinda Zabritski detailed the healthy trends being spotted in car financing through the second quarter of this year.

Prior to this report, Zabritski shared a few other auto financing-related trends as part of Auto Remarketing’s annual Power 300 issue.

Below is our Q&A with Experian’s senior director of automotive finance, as featured in the Aug. 1 issue of the magazine: 

Auto Remarketing: Experian recently released a report on the most prevalent areas for leasing. Per that information, what are some of the factors that make Michigan, New York and New Jersey so leasing heavy?

Melinda Zabritski: Leasing in Michigan is mostly impacted by the domestic manufacturers. When you look at what is leased in that state the domestics lead the market. Other regions with heavy leasing tend to have high population concentrations with short driving distances (e.g. N.Y. and N.J.).

AR: On the other hand, Arkansas’s leasing penetration rate of 1 percent is significantly lower than the national high. What are some of the factors contributing to this rate?

MZ: Arkansas has fewer high population centers and leans toward lower credit quality – both of these impact leasing. Leasing remains a very prime product.

AR: Earlier (in June), Experian reported long-term vehicle loans broke records. What risks, if any, do these growing loan terms present to the industry? Why or why not?

MZ: Overall, long term loans can benefit consumers by helping keep payments down which can prove a positive impact toward delinquency. The negative impact can happen when the consumer doesn’t keep their vehicle long enough to result in positive equity. There can also be a negative to the lender if the loan does go delinquent. In those cases, it’s likely there will be a higher loan balance resulting in increased severity.

AR: Also, long-term loans are often historically more popular on new-car vehicles. Why the surge in longer-terms for used-vehicles, as well? What is pushing that trend?

MZ: Long-term loans have been around historically on used vehicles. However, the more recent growth is in line with the increased sales seen in the past few years.

Long-term loans are essentially found on late-model used vehicles and as vehicles have been getting more expensive, today’s late model used vehicle carries a higher price tag — making the long term loan very appealing.

Other features in this special section include:
4 questions with NextGear’s Brian Geitner
4 questions with NADA Used Car Guide's Larry Dixon
4 questions with Infiniti CPO manager Sam Liang
4 questions with Black Book’s Anil Goyal
4 questions with Autotrader president Jared Rowe
4 questions with Geoff Parker of ADESA Cincinnati-Dayton 
4 questions with Hudson Cook chairman Tom Hudson
4 questions with Edmunds CEO Avi Steinlauf