As consumer behavior shifts, the auto industry must adapt, addressing challenges and taking advantage of new opportunities. Turning to data-driven insights is critical to making good financial decisions, and data suggests that building strong customer experiences is foundational for success in the industry.
The current state of the auto industry trends is complex, with high instances of consumer stress and fraud. Debt for auto loans and leases has risen nearly 15% in the last 10 years, and the total outstanding balances for auto loans and leases equals $1.7 trillion. Currently, auto debt is the fastest growing category in non-mortgage consumer debt.
Part of rising debt is due to rising prices and interest rates. Between 2016 and 2024, there has been a 34% increase in vehicle price, and interest rates are 56% higher. This has led to a drop in auto loan and lease originations; in fact, there was a $9.2 billion decrease in originations YoY in September 2024.
These pressures have led to increasing fraud and delinquency. In 2023, synthetic identity fraud rose by 98%. This resulted in $7.9 billion in losses.
This data presents a grim reality, but there are solutions. Improving the buying experience is key, as well as using fraud prevention measures. 72% of buyers say that they would visit dealerships more if the buying process were improved. This speaks to the significant role that the buying process plays, and reveals a path forward for the auto industry as it navigates the new year.
