New, used vehicle loans take lead over cash payments, leasing

New and used vehicle loans lead the way in terms of the percent of total U.S. transactions per vehicle purchase type that occurred within the last 12 months, according to J.D. Power’s recent Automotive Market Metrics.

Released on May 4, 2021, the metrics reveal that 56% of new vehicle transactions and 51% of used vehicle transactions were loans during this period. In comparison, 16% of new and 46% of used vehicles made up cash transactions and 28% of new and 3% of used vehicle transactions were leases.  

The report also shows that the number of days to turn dropped significantly from April 2020 to April 2021, with new vehicles hovering between the 54-64 day marker, and used vehicles in the 64-74 day zone by April this year.

For new leases versus new loans — new loans are hovering around the same transaction amount year-over-year from April 2020: around the $720-740 marker. Those figures dipped from May to August 2020, but then started to increase until April 2021, with the exception of a slight dip in March 2021.

On new vehicle prices versus the customer facing price, data from the JDPA PIN Incentive Spending REPORT (ISR) shows vehicle prices dipped from close to $46,000 in April 2020 and started to increase again in the fall of that year. Prices have been somewhat stagnant or there have been no significant increases between January and April of this year. 

On transaction prices, these have increased from April 2020 YOY, with prices gaining some momentum from December 2020 to January 2021 and then resting above April 2020 figures from January to April of this year. 

The report also indicates that the percentage of negative equity vehicles at trade-in declined from April 2020, from between 35-40% to 30% in April 2021, while the percentage of trade-ins has mostly remained between 45-50% group during that period — although it has increased YOY.

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