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The leasing boom continues, hybrids hit their stride, new universal EV charging framework

The leasing boom continues, hybrids hit their stride, new universal EV charging framework

Go deeper (5 min. read)

December 07, 2024

Hey, everyone. New car buyers had high monthly payments again in Q3…

According to Experian, the average monthly payment climbed to $737 in Q3 — $187 more a month than in 2019 and nearly $2,500 more a year…

Prompting even prime consumers to increase used financing last quarter.

—CDG

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Each week, I curate the top 5 automotive industry headlines based on the topics CDG readers engaged with the most on social media. Let’s get started.

1. Leasing continued to rise in Q3, strengthening captive lenders

According to Experian’s Q3 auto finance report, automaker-owned captive lenders still lead in new car financing, but their grip is loosening, with market share slipping from 30.02% to 29.13% over the past year. Meanwhile, banks and finance firms made modest gains of 0.53% and 1.95%.

Zooming in: Leasing is giving captives a boost. Nearly 24% of new vehicles were leased last quarter — up from 20% last year and 17% in 2022 — driven largely by prime buyers, with 31% choosing to lease.

But it’s a tougher road for Subprime buyers. Their loan market share dropped to 15.54%, down from 19.45% in 2019, and even used car loans are proving harder to secure.

(Go deeper: 3 min. read)

The reason?...

2. Negative equity and delinquencies cast a shadow on auto lending

Rising delinquencies, surging loan-to-value (LTV) ratios, and affordability challenges have left many borrowers treading water.

Over half of used car loans now carry LTVs above 120%, meaning borrowers owe 20% more than their vehicles are worth — a problem that’s doubled since 2021 due to pandemic-era pricing.
The average trade-in with negative equity has hit a record $6,458, per Edmunds.

Why it matters: Negative equity limits borrowers' options. They often can’t trade in without rolling debt into their next loan or refinance to lower payments, making it harder for dealers to close sales for these customers.

On top of that — delinquencies are also climbing. Serious delinquencies (60+ days late) among subprime borrowers hit 6.23% in October, the highest since the Great Financial Crisis. Even prime borrowers are falling behind — squeezed by inflation and stagnant wages.

(Go deeper: 3 min. read)

Don’t wait for March or April to boost your tax season sales.

With the Tax Max “file and drive” sales event Tax Max can help a customer access their tax refund same day for a down payment starting January 2! No need to wait for the IRS.

The same day tax refund advance, allows a Tax Max customer to apply for up to $7,000 on the same day they file to use toward their down payment.

No additional work from staff as the entire tax filing process can be completed online and from your customer’s phone. Tax Max prepares the return, refund sent to dealer for a down payment and the customer gets the car. It’s that simple with Tax Max.

In other news…

3. Universal EV charging framework set to roll out in 2025

An upcoming universal Plug & Charge protocol is aiming to eliminate one of the biggest hassles of EV ownership: public charging.

Spearheaded by automakers like Ford, GM, and Toyota, along with charging networks such as ChargePoint and Electrify America, the system builds on the ISO 15118 standard, allowing EVs to automatically authenticate and pay when plugged in — no apps, cards, or extra steps needed.
And key upgrades include enhanced security via a Certified Trust List and bidirectional charging, which lets EVs send power back to the grid.

Bottom line: While Plug & Charge removes some pain points for drivers, it’s only part of the larger EV adoption puzzle.

(Go deeper: 4 min. read)

In the meantime…

4. Hybrid reliability is neck and neck with gas-powered cars

Consumer Reports’ latest Automotive Report Card reveals some good news for hybrids — they’re now nearly as reliable as gas cars. And it’s clearly resonating with buyers. Hybrid sales are up 53% this year.

But what about EVs and PHEVs?

They’re improving, but still have some catching up to do. EVs see 42% more problems than gas cars, and PHEVs encounter 70% more.
That’s a big improvement from last year when problem rates were 79% and 146% higher, respectively.
Still, the gap shows there’s more work ahead for these technologies.

Bottom line: While EVs and PHEVs are making progress, hybrids are hitting their stride and quickly becoming the sweet spot for today’s buyers looking for reliability and performance.

(Go deeper: 3 min. read)

Have a tip for our editorial team? Send us your scoop at [email protected].

So — it makes sense that…

5. Hybrids drive higher conquest rates in the auto market

Hybrids are quietly becoming a conquest machine for automakers, according to a new S&P Global Mobility study. With their mix of electrification, affordability, and convenience, they’re stealing buyers from rival brands faster than gas-powered cars.

Here’s the proof:

Of 19 hybrid and PHEV models studied, 14 had better conquest rates than their gas counterparts.
And compact SUVs stand out, with the Hyundai Tucson leading the charge (23.3% conquest gap), followed by the Ford Escape (21.9%) and Kia Sportage (19%).
Yet — Toyota and Hyundai are the clear winners, dominating six of the top seven spots.

But not all hybrids are created equal. On the luxury side, steep costs are a roadblock. The BMW XM, for example, comes with a jaw-dropping 138% increase in monthly payments over the gas-powered X7. Leasing offers little relief for budget-conscious buyers.

Big picture: Still — the hybrid market is growing fast. Market share has jumped to 12.3% in 2024, up from 9.8% last year, and loyalty among hybrid owners has risen from 37% to nearly 42%.

(Go deeper: 2 min. read)