Experian: TD Auto Finance Closes 2011 Among Top 20 Lenders
SCHAUMBURG, Ill. — When Experian Automotive tallied up the top 20 lenders for its quarterly analysis of the automotive finance market, one company posted year-over-year gains higher than most of the other ones mentioned altogether.
TD Auto Finance broke into the top 10 of all lenders during the fourth quarter thanks to a 230-percent year-over-year market share gain, leaving the company with 1.81 percent of the entire auto finance sector.
Experian indicated only one other company posted a triple-digit gain year-over-year. That operation was PNC Bank, which enjoyed a 103.9 percent gain to secure 0.95 percent of the market.
"Our understanding is that TD Auto moved to a national footprint with a very strong dealer network," stated Melinda Zabritski, director of automotive lending at Experian Automotive.
And interestingly, when TD announced its acquisition of Chrysler Financial, this is exactly what the company had set its sights on: ramping up U.S. market share.
Experian's list of top 20 lenders for overall market share include:
Ally: 6.79 percent
Wells Fargo: 5.61 percent
Chase: 4.72 percent
Toyota: 4.53 percent
Capital One: 3.97 percent
Ford: 3.88 percent
Honda: 3.39 percent
Bank of America: 3.17 percent
TD Auto: 1.81 percent
Nissan/Infiniti: 1.71 percent
Fifth Third Bank: 1.71 percent
Santander: 1.61 percent.
AmeriCredit: 1.40 percent
US Bank: 1.19 percent
SunTrust: 1.14 percent
VW Credit: 1.10 percent
BMW Bank: 0.95 percent
Credit Acceptance: 0.95 percent
PNC Bank: 0.95 percent
Huntington: 0.93 percent
The top 20 used-vehicle lenders by market share include:
Wells Fargo: 6.92 percent
Ally: 4.25 percent
Capital One: 3.97 percent
Chase: 3.59 percent
Toyota: 2.54 percent
Bank of America: 2.50 percent
Santander: 2.19 percent
Fifth Third Bank: 1.60 percent
TD Auto Finance: 1.59 percent
Credit Acceptance: 1.52 percent
AmeriCredit: 1.39 percent
CarMax: 1.29 percent
Ford: 0.99 percent
USAA: 0.98 percent
Honda: 0.90 percent
Westlake: 0.90 percent
Huntington: 0.82 percent
BMW Bank: 0.81 percent
SunTrust: 0.80 percent
US Bank: 0.79 percent
And the top 20 new-vehicle lenders by market share include:
Ally: 11.05 percent
Ford: 8.73 percent
Toyota: 7.87 percent
Honda: 7.56 percent
Chase: 6.61 percent
Bank of America: 4.30 percent
Capital One: 3.98 percent
Nissan/Infiniti: 3.86 percent
Wells Fargo: 3.41 percent
TD Auto Finance: 2.17 percent
Hyundai: 2.06 percent
VW Credit: 2.06 percent
Fifth Third Bank: 1.90 percent
US Bank: 1.85 percent
SunTrust: 1.72 percent
PNC Bank: 1.59 percent
World Omni: 1.52 percent
AmeriCredit: 1.42 percent
BMW Bank: 1.19 percent
Citizens: 1.11 percent
In another part of Experian's quarterly report, Zabritski touched on trends she believes stems from conservative lending activity.
Experian determined repossession rates and average charge-off amounts all dropped year-over-year as the fourth quarter closed.
The overall repo rate slipped 5.8 percent to 0.63 percent, the lowest level of the past two years. Experian indicated the overall rate stood at 0.67 percent at the end of 2011 and 0.714 percent at the finish of 2010.
Experian indicated captive finance companies saw their repossession rates drop the most year-over-year, plunging 18.9 percent to 0.43 percent. The level continued a steady decline since 2010 when it was 0.60 percent.
Commercial banks also enjoyed a healthy decline in repossessions, according to Experian's quarterly analysis. Banks' repo rates sunk 15.2 percent to 0.31 percent, a level only bested by the rate posted by credit unions.
Experian noted the repo rate generated through credit unions came in a 0.18 percent, a level 5.5-percent lower than the fourth quarter of 2011.
By far, the highest repo rates came within finance companies and other providers, lenders such as Santander, Consumer Portfolio Services and others not holding bank deposits. Experian found their repo rate settled 4.7 percent lower to sit at 2.47 percent, reversing an end-of-year trend that produced a gain from 2010 to 2011.
Meanwhile, Experian determined lenders posted across the board declines in average charge-off amounts.
Overall, the fourth-quarter reading dropped $779 to $6,815, an amount approaching half of the level Experian reported two years earlier. At the end of 2010, the average charge-off amount was $10,315.
Experian broke down the average charge-off amount by lender category:
—Commercial banks: down $788 to $6,141.
—Captive finance companies: down $695 to $6,916.
—Credit unions: down $561 to $6,442.
—Other finance companies: down $761 to $7,126.
Zabritski explained what the trends mean.
"We're still seeing the effects of very conservative lending from 2008-2010," Zabritski said. "This has had a positive impact on overall consumer delinquency as seen in the low repo rates.
"Especially when it comes to repossessions, the strong wholesale market has also helped reduce the severity of the losses as seen with the reduction in charge-off amounts," she continued. "With such low delinquencies and strong performance, it helps also shed light on why we're seeing growth in subprime financing."
Experian reiterated its quarterly credit trend analysis features market reporting data and analysis coming from its AutoCount Risk Report, which analyzes automotive lending markets based on a uniform measurement of credit quality that segments markets by geography, credit score and vehicle registrations, among other factors.
It also incorporates data from the Experian-Oliver Wyman Market Intelligence Reports, which provide topical, quarterly analysis, peer benchmarking options and commentary on key issues facing the financial services industry.