Hybrid sales have been increasing in 2026, and those buyers moving to hybrids have been finding a lower monthly payment, $119 below the average, according to Experian’s State of Automotive Finance Market Report for Q2.
Driving the news: The average new auto loan jumped by $1,715 year-over-year to $43,610, according to the report.
The average monthly payment increased by $16 YOY to $765, with the term at 69.46 months and the rate at 6.35%.
The average interest rate actually dropped from 6.79% in the middle of 2025 to 6.35.
On the used side, the average loan jumped $875 to $27,852, with payments up $10 to $542 and the average term at 67.86 months with an average rate of 11.19%.
Hybrid payments lower: In a recent JD Power report featured by CDG, the share of hybrid sales grew to 18.2% in August.
As hybrid sales have grown, Experian found that new hybrid payments were the lowest among all powertrains at $646.
EV payments were at $692, and ICE vehicles finished at $721.
“With fuel prices, that’s where consumers have really shifted, more into that hybrid space,” said Melinda Zabritski, Experian’s head of automotive financial insights. “Especially looking at payments, that was where some of the most affordable payments out there were, hybrids.
“I did go in and look at the top hybrids…I think one of the reasons we were seeing the payments as low as they were was it does look like there’s a lot of incentives coming into play.”
On the used market, the hybrid payments fell in the middle ($550), with EVs at $557 and ICE the lowest ($515).
Growth in subprime: The average credit scores for new buyers dropped by 5 points to 751 year-over-year, and used scores were down 1 point to 688.
The share of near prime and lower risk tiers grew to approximately 28% from 25% a year ago.
Prime and near prime fell less than 1% each.
At the same time, 30-day and 60-day delinquencies are higher year-over-year.
“For both new and used, we’re starting to see growth in subprime. It’s still a very small portion of the industry,” Zabritski said.
“Despite the fact that we have increased delinquency, we are still seeing lenders grow, especially in the FINCO space. We’re seeing a lot of growth with some dealer captives, and some other dealer groups are looking to start their own dealer captives.”
Banks lead in financing: Banks held their lead in the total automotive finance market share in Q2 at 27.15%, though it was down from 27.25% in 2025.
The captives made up 26.26%, and credit unions 20.38%.
The top 25 lenders held an 81.82% share in the new financing and 51.98% in the used market.
In the new financing only, captives held a 52.23% share.
“There are a few banks that purposely pulled back a little bit in auto, and that’s a lot of the same reason that we saw the credit union share decrease,” Zabritski said. “Banks put on a lot of share, and it’s just the classic, got a little bit overweighted in auto, so we’re looking to do a rebalance.”
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Bottom line: Financed amounts and payments grew in the past year, and more consumers drifted to hybrids, finding lower payments. The used share of financing grew from slightly to a 58.8% share, while new volume was at 41.2%.
“I am seeing from a consumer standpoint, [they are] certainly looking for affordability, and one of the reactions to that is shifting into older vehicles,” Zabritski said. “I would say having the right inventory mix to meet the consumers where they are, and obviously the correct lender mix.”
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