![](\"https:\/\/mms.businesswire.com\/media\/20260528635242\/en\/2233160\/22\/Experian_BM_RGB.jpg\")
<\/a>![](\"https:\/\/mms.businesswire.com\/media\/20260528635242\/en\/2233160\/21\/Experian_BM_RGB.jpg\")
<\/a>\nA similar pattern was observed in the used vehicle market. The percentage of used vehicles with loan terms more than six years hit 31.54%, up from 28.60% in Q1 2025. Meanwhile, used vehicles with loan terms more than 85 months grew to 1.40% in Q1 2026, from 1.32% the year prior.<\/p>
\n\u201cAffordability continues to shape financing decisions across the automotive market,\u201d said Melinda Zabritski, Experian\u2019s head of automotive financial insights. \u201cWhile shoppers continue to lean toward larger, more expensive vehicles, we\u2019re seeing more consumers take advantage of longer-term loans to offset rising monthly costs.\u201d<\/p>
\nIn the first quarter of 2026, the average loan amount for a new vehicle increased $2,150 year-over-year, reaching $43,925, while the average monthly payment for a new vehicle increased from $748 to $770 during the same period.<\/p>
\nOn the used side, the average loan amount saw an uptick of $785 from a year ago to $27,070 in Q1 2026, and the average monthly payment grew from $523 last year to $531 this quarter.<\/p>
\nInterestingly, while the average monthly payment for new vehicles continues to rise, nearly 20% of new vehicles had an average monthly payment less than $500 in Q1 2026.<\/p>
\nAutomotive refinancing supports consumer affordability and lender performance<\/b><\/p>
\nAs interest rates steadily decline, refinancing has increasingly become an option for consumers looking to ease monthly payment pressures, as well as lenders hoping to find ways to offer more competitive rates.<\/p>
\nIn Q1 2026, on average, consumers trimmed 2.2% off their interest rate after refinancing. The average refinanced interest rate was 8.05%, down from 10.29%. This lowered the average monthly payment by $81 for consumers who refinanced during the quarter.<\/p>
\nInterestingly, credit unions accounted for the largest share of automotive refinancing at 63.43%, from 62.31% in Q1 2025, compared to banks going from 23.51% to 22.59%. In addition, the payment difference when refinancing with credit unions was $101 this quarter and those who refinanced with banks saved $60.<\/p>
\nSubprime segment continues to grow as credit access increases<\/b><\/p>
\nDuring the first quarter of 2026, subprime borrowers made up 15.75% of total vehicle financing, an increase from 14.40% last year.<\/p>
\nFor new vehicle financing, the subprime market grew to 6.88% in Q1 2026, from 5.61% in Q1 2025. In used vehicle financing, the subprime market increased from 19.36% last year to 20.60% this quarter.<\/p>
\n\u201cWhile consumers are benefiting from improved refinancing conditions, we\u2019re also seeing broader financing accessibility emerge,\u201d Zabritski continued. \u201cThere continues to be increased momentum within the subprime segment as financing options expand across the automotive finance market.\u201d<\/p>
\nAdditional findings for Q1 2026:<\/p>
- \n
- \nThe average loan term for a new vehicle was 69.48 months this quarter, and the average loan term for a used vehicle was 67.73 months.<\/li>\n
- \nBanks accounted for 28.42% of total market share in Q1 2026, followed by captives (26.83%), and credit unions (20.09%).<\/li>\n
- \nThirty-day delinquencies rose to 2.00% in Q1 2026, from 1.95% in Q1 2025, while 60-day delinquencies increased from 0.83% to 0.86% year-over-year.<\/li>\n
- \nNew electric vehicle financing declined from 10.93% last year to 6.23% this quarter, and hybrid vehicles increased from 12.08% to 14.90%.<\/li>\n<\/ul>