Author: Mintel Group Ltd.
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Vehicle Financing  - US - February 2021

OVERVIEW
What you need to know 
Key issues covered in this Report
Definition 
COVID-19: US context
EXECUTIVE SUMMARY 
Top takeaways 
Market overview 
Impact of COVID-19 on vehicle financing
Figure 1: Short-, medium- and long-term impact of COVID-19 on vehicle financing, February 2021
Opportunities and challenges 
Digital loan advisors can reduce consumer pain points
Low interest rates on EVs can provide a much needed boost to the segment
COVID-19 financial assistance programs are still in high demand
Auto loans offer financial flexibility and alternative spending
THE MARKET – KEY TAKEAWAYS
Vehicle financing during the 2008 Great Recession and COVID-19 recession parallel each other
Low financing rates could give a jolt to the EV market
Interest rates expected to drop further in 2021
IMPACT OF COVID-19 ON VEHICLE FINANCING
The state of vehicle financing during COVID-19 parallels the Great Recession
Figure 2: Short-, medium- and long-term impact of COVID-19 on vehicle financing, February 2021
Lockdown
Re-emergence
Recovery
COVID-19: US context
Learnings from the last recession
MARKET FACTORS 
Auto loan interest rates expected to drop throughout 2021
Vehicle financing can alleviate stress caused by economic downturn
Figure 3: Consumer confidence and unemployment, 2000-December 2020
Potential COVID-19 stimulus checks could be a boon to cash down payments
Evolution of tech
MARKET OPPORTUNITIES 
Educate consumers on co-branded card benefits to increase adoption
Figure 4: Consumer attitudes toward credit cards, December 2020
COVID-19 incentives generate interest in OEM auto loans
Figure 5: Consumer attitudes toward COVID-19 vehicle financing incentives, December 2020
Low financing rates on EVs can assist the growing segment
COMPANIES AND BRANDS – KEY TAKEAWAYS 
GM offers 0% financing to push new and used EV inventory
Rivian and Chase soon to offer a fully digital vehicle financing experience
Ally Financial revamps automated decision progress
AutoFi lending-as-a-service to be a boon to online used car dealerships
COMPETITIVE STRATEGIES
GM to offer 0% financing on used EVs
Rivian and Chase partner to create all-digital financing experience
Ally revitalizes and ramps up auto loan automation process
AutoFi offers “lending-as-a-service” to automakers, lenders and dealers
Figure 6: AutoFi lending-as-a-service campaign, December 2020
CONSUMER TREND DRIVERS IMPACTING THE ROLE OF TRANSPORTATION 
Technology
Value
Wellbeing
THE CONSUMER – KEY TAKEAWAYS 
Financing is the most popular way to pay for a vehicle
Establishing a relationship can lead to future business
Consumers gloss over most auto loan lender benefits
COVID-19 relief programs are a must for struggling consumers
CONSUMER CAR BUYING BEHAVIORS
Longer-term purchasing plans opens door for early communication
Figure 7: Vehicle purchase timeline, December 2020
Price tag of new vehicles opens door for financing offers on used options
Figure 8: Vehicle type consideration, December 2020
Figure 9: AAA Northeast, Vehicle Lending, February 2021
VEHICLE FINANCING BEHAVIORS
Financing is the most popular way to pay for a car
Figure 10: Vehicle payment options, December 2020
A small portion of car buyers are unsure how to pay for their next vehicle
Figure 11: Vehicle payment options, December 2020
The oldest and youngest car buyers are paying full in cash
Figure 12: Vehicle payment options, by age, December 2020
Figure 13: Credit Sesame email campaign, October 2020
AUTO LOAN LENDERS
A prior financial relationship leads to future auto loans 
Figure 14: Auto loan lenders, December 2020
Figure 15: Auto loan lenders, by age, December 2020
OEM loans are popular among older consumers
Figure 16: Auto loan lenders, by age, December 2020
AUTO LOAN BENEFITS
Consumers overwhelmingly focus on low- or no-interest; overlook other benefits
Figure 17: Auto loan benefits, December 2020
Early-career consumers seek COVID assistance as a lender benefit
Figure 18: Auto loan benefits, by age, December 2020
Source: Lightspeed/Mintel
Offering no money down attracts consumers to OEM auto loans
Figure 19: Auto loan benefits, by lender, December 2020
ATTITUDES TOWARD VEHICLE LOANS
Pre-purchase financing education is needed to help car buyers avoid surprises
Figure 20: Consumer attitudes toward auto loans, December 2020
Consumers feel confused, overwhelmed by vehicle financing
Figure 21: Perceptions of vehicle financing, December 2020
COVID-19 loan qualification relief programs can aid concerned consumers
Figure 22: Perceptions of vehicle financing, by household income, December 2020
Securing the best auto loan is the most important part of car buying
Figure 23: Perceptions of vehicle financing, December 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Forecast
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations

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