Consumer behavior in the auto industry is changing as a result of increased financial stress. As the automotive industry faces these changes, it is important to adapt and take advantage of new opportunities, while also dealing with rising challenges. Improving the buying experience should be a core objective for the auto industry moving forward.
Debt for auto loans and leases is increasing, and is now the fastest growing category in non-mortgage consumer debt. The average new vehicle prices are also ballooning; between 2016 and 2024, there has been a 34% increase in new vehicle prices. Interest rates rose by 56% during the same time period.
These factors have ushered in increased fraud as well. In 2023, synthetic identity fraud rose by 98%. This also increases the risk of delinquency. Between January and November 2024, 1.5% of all auto loans and leases resulted in delinquencies of 60+ days past due.
While these problems are significant, there are solutions. For example, 54% of consumers would buy from dealerships with a preferred experience, even if it didn’t have the lowest price. This reveals the importance of a positive buying experience. Improving customer experiences, while also addressing fraud, is vital to finding success in the auto industry.
