SCHAUMBURG, Ill. — Experian Automotive boiled down all of
the data the vehicle financing industry generated during third quarter into two
words: Good news.

Experian found that outstanding automotive loan balances
reached a record high since the company began publicly reporting the data seven
years ago.

According to its latest State of the Automotive Finance
Market report, outstanding balances on automotive loans reached $782.9 billion,
up $103 billion from Q3 of last year.

Additional findings from the report showed 30-day automotive
loan delinquencies were down 3.4 percent over last year, going from 2.67
percent in Q3 of last year to 2.58 percent in Q3 of this year.

Meanwhile, Experian also noticed 60-day delinquencies
remained flat.

"The combination of higher loan balances and relatively flat
loan delinquencies is good news for everyone connected to the automotive
industry, including consumers, lenders, retailers and manufacturers," said
Melinda Zabritski, senior director of automotive lending for Experian
Automotive.

"The availability of credit, combined with consumers'
continued strong performance repaying their loans, has a positive spiral
effect. It allows lenders to slowly but surely take on additional risk while
providing more access to loans and paving the way for higher auto sales,"
Zabritski continued.

Zabritski went on to point out that vehicle loan balances
are growing across the country.

Areas showing the fastest percentage growth year-over-year
included California (up 29.3 percent), Texas (up 26.3 percent) and Nevada (up
26.0 percent).

The states with the slowest growth rates year-over-year
included Hawaii (up 12.4 percent), Wyoming (up 12.3 percent) and Michigan (up
6.8 percent).

States with the steepest decline in the loan balances currently
30 days delinquent year-over-year included Hawaii (down 12.75 percent), Vermont
(down 11.69 percent) and Oregon (down 11.64 percent).

States with the biggest jump in 30-day loan balance
delinquencies year over year included Rhode Island (up 18.53 percent), Wyoming
(up 11.98 percent) and Alaska (up 10.24 percent).

Zabritski acknowledged one of the few dark clouds in Q3 was
the sharp increase in vehicle repossessions for the quarter.

In Q3 of last year, the repossession rate stood at 0.40
percent, but it jumped to 0.62 percent in Q3 of this year – marking a 54.4-percent
increase.

"However, the increase in repossessions was limited entirely
to finance companies, which typically provide loans to the subprime market,"
she said.

Zabritski noted that finance companies saw their
repossession rate jump 124.9 percent, going from 1.18 percent in Q3 of last
year to 2.66 percent in Q3 of this year.

"Repossession rates for captive finance companies, banks and
credit unions all dropped slightly in the quarter," Zabritski said.

Experian highlighted a quartet of other noteworthy findings
from the third quarter, including:

—Outstanding loans in the nonprime, subprime and
deep-subprime segments were up, but only slightly (36 percent in Q3 2013 from
35.9 percent in Q3 2012).

—The percentage of loan dollars that are 30 days delinquent
rose slightly (2.16 percent in Q3 2012 to 2.17 percent in Q3 2013).

—The percentage of loan dollars that are 60 days delinquent
rose slightly (0.50 percent in Q3 2012 to 0.52 percent in Q3 2013).

—The average charge-off amount for loans gone bad jumped
from $7,026 in Q3 2012 to $7,770 in Q3 2013.

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