2. Overview
Companies in this industry provide auto loans to consumers and businesses.
Auto loans are issued by vehicle dealers, large financial institutions and locally based financial institutions such as credit unions and community banks.
Industry participants generate revenue through the interest and fees that are included in the installment payments of borrowers.

3. Overview
The industry comprises 2,617 businesses that employ more than 123,000 people.
Total auto loan volume increased by $23.9 billion in fourth quarter 2011 to $658 billion.

4. About the Competition
The top 5 companies in the auto lending market are Ally Financial, Inc., Toyota Motor Credit Corporation, Ford Motor Credit Company, LLC, Volkswagen Bank GmbH and General Motors Financial Company, Inc.
The top five of all 811 companies in the market account for nearly $20.7 billion in annual sales.

5. Customer Demographics
The average length of car ownership has hit a record 52.2 months.
New vehicle loans to nonprime, subprime and deep subprime customers (those with a history of credit problems such as late payments and charge-offs) increased by 13.8 percent from 2010 to 2011.

6. Industry Trends
The mortgage market crash resulted in U.S. sales of new vehicles sliding 21 percent in 2009.
Funding availability issues are lessening.
Collection effectiveness has led to a nearly 50 percent drop in charge-offs from 2010 to 2011, and significantly lower late-payment numbers industry-wide.

7. Industry Trends
Online dealer application portals make it possible to provide buyers with an immediate credit decision, and conditioned approvals are on the decline.
The market has loosened credit standards, which makes it a good time to buy for those who are in the market.

8. Growth Areas
In the second quarter of 2011, nonprime loans totaled 22 percent of new-car loans, up from 18 percent a year earlier.
Dealers have begun to focus on value-added subprime financing and leasing and floor plan financing.

9. Growth Areas
Auto loan volume topped $100B in the third quarter of 2011, a level not seen since mid-2008.
The length of time between when consumers pay off one loan and take out another is increasing, leading to a growing recapture market.

10. The Future of the Industry
With 2011 seeing the lowest rates of charge-offs and delinquencies in 10 years, auto finance industry performance should remain stable for the remainder of 2012.
Today’s automobiles on the road have hit an all-time high of 10.6 years of age. Consumers owning older cars will result in ever-increasing demand for newer and more reliable ones.

11. The Future of the Industry
The recession led to a tight credit market, high unemployment rates and depressed consumer spending, all of which affected consumers' auto purchases. The industry is just starting its recovery, but loosened credit standards will tighten in an effort to reduce risk to lenders as demand increases.
Industry growth approximates overall United States economic growth, taking into account the losses of several major lenders during the recession.
Revenue growth is forecast to meet the GDP at 2.1 percent annually through 2017.

12. Advertising Strategies
With the struggling economy, consumers continue to worry about taking on debt and, if they have damaged credit, will it hamper getting a good loan. Consumers should be interested in the variety of financing options available, and what the economic trends mean if they’re considering making a car purchase. Buyers with bad credit may be able to get better deals with online financing than traditional bank loans.

13. Advertising Strategies
Car dealers have a bad reputation among consumers, leaving many people wary of being taken advantage of. Consumers would respond to messages that help them have confidence that they’re dealing with a reputable lender and ensure them that the dealer is prepared to explain all the details of financing with them to ensure a good plan is put into effect for both parties.

14. Advertising Strategies
Advertisements should target women through television dayparts and through the commercial message. Women will respond positively to dealerships and lenders that seek to provide them with information and explanations up front. This directness can encourage women to give a particular dealer or lender business based on their honest approach.