WESTLAKE VILLAGE, Calif. — Power Information Network recently reported that credit tightening is occurring throughout the auto industry, with down payments on new vehicles growing as a result.

More specifically, the company indicated that down payments as a percentage of the transaction price have risen to almost 19 percent in the third quarter of this year, which is the highest over the past seven quarters.

Along with the increased down payment, PIN found that the amount financed, in addition to the loan-to-cost ratio, have lessened to the lowest levels witnessed over the past seven quarters.

"Other metrics reflect the changing landscape in the new-vehicle industry," officials said. "There has been an increase in the average age of trades since the substantial slowdown of the industry in May when fuel prices skyrocketed and consumer confidence fell.

"As customers moved downstream to smaller vehicles this past spring, the average monthly payment industry-wide dropped by more than $25," they added. "Manufacturer attempts to stimulate the industry via low APR programs reduced the average APR by more than 0.75 point last spring, and the percent of deals with a low APR simultaneously spiked."

Despite the changes occurring in the industry due to higher fuel prices and the faltering economy, PIN discovered that some measures remained stable.

"Since the start of 2007, the average term of a loan taken out at the dealership has been 64 months in every quarter except one (when it was 63 months," executives pointed out. "Additionally, the percent of upside-down trades on finance transactions has remained steady despite plummeting values of large pickups and utilities.

"Many owners of these types of vehicles have most likely decided to wait out the current environment, which in turn would contribute to the higher trade-in age discussed," they continued.

PIN also offered a breakdown of statistics:

Total Down

3Q 2008: 18.97 percent

2Q: 17.45 percent

1Q: 17.44 percent

3Q 2007: 17.24 percent


Percent Financed:

3Q: 81.01 percent

2Q: 82.55 percent

1Q: 82.56 percent

3Q 2007: 82.75 percent



3Q: 97 percent

2Q: 99 percent

1Q: 99 percent

3Q 2007: 99 percent



3Q: 60.10 percent

2Q: 61.20 percent

1Q: 52.10 percent

3Q 2007: 55.30 percent


Trade-in Vehicle Age:

3Q: 5.9

2Q: 5.7

1Q: 5.6

3Q 2007: 5.5


Monthly Payment

3Q: $439

2Q: $427

1Q: $453

3Q 2007: $462



3Q: 6.72 percent

2Q: 6.22 percent

1Q: 7 percent

3Q 2007: 7.42 percent


APR/IRR Less Than 5 percent

3Q: 28.50 percent

2Q: 38.10 percent

1Q: 25.90 percent

3Q 2007: 22.50 percent


Percentage at Negative Equity

3Q: 33.87 percent

2Q: 35.79 percent

1Q: 36.47 percent

3Q 2007: 35.59 percent



3Q: 64 months

2Q: 63 months

1Q: 64 months

3Q 2007: 64 months

PIN noted that all data was filtered for non-luxury finance transactions.