Auto loan demand expected to rise in 2025, but credit risks persist

A survey by TransUnion reveals that while more consumers might be considering an auto loan or lease in 2025, many of them will face more difficult credit challenges than expected.

Digging in: The study—released as part of TransUnion’s Consumer Pulse Study in conjunction with the 2025 AFSA Vehicle Finance Conference in New Orleans—highlights the importance of lenders assessing the creditworthiness of potential buyers and maintaining an awareness of the credit portfolios of current borrowers. 

• Among the consumers planning to apply for new credit or refinance existing credit by 2025, nearly one in four plan to shop for a new auto loan or lease during that period.

• Of those consumers, the survey found that 31% believed their finances were better than expected at the time of the Oct. 2024, survey than at the start of the year.   

Between the lines: TransUnion’s Consumer Pulse study also revealed that Millennials are expected to be the most active car shoppers in 2025, with approximately 31% indicating that they are very or somewhat likely to buy a car from Oct. 2024 – Jan. 2025, followed by Gen Z, then Gen X buyers.    

• Of those surveyed, 15% of Millennials indicated they are very likely to buy a car, and 16% reported they were somewhat likely.

• 7% of Gen Zers reported being very likely to buy a car from Oct. 2024 – Jan. 2025, while 14% indicated they were somewhat likely.

• Among Generation X, 7% reported being very likely to buy a vehicle during the designated time frame, and 11% indicated they were somewhat likely.

Bottom line: The TransUnion Consumer Pulse survey is yet another indication that even amid all the optimism surrounding the auto business (shifting into 2025), spanning exciting new vehicles to innovative sales tools, lenders and dealer teams alike still need to be diligent in taking care of the fundamental aspects of the business.   

Become an automotive insider in just 5 minutes.

Get the weekly email that delivers transparent insights into the car market.

Join 90,000+ others now, it's free:

Ikon Technologies was founded by dealers, for dealers, to solve the daily challenges your dealership faces.

Our no-cost Lot Management Platform, with Find the Car, Find the Keys™ technology, makes finding inventory easy, while our Dealer-branded Connect app drives customer loyalty and revenue.

At Ikon, we’re more than a tech provider—we’re your partner. Schedule a demo today to see how Ikon Technologies can help drive your dealership’s success.