Auto dealers may want to take another look at their lender mix, as banks are regaining traction in the automotive finance space after several quarters of declining influence.

That’s according to Experian’s State of the Automotive Finance Market Report: Q1 2025, which shows banks grew their total market share of vehicle financing to 26.6% in the first quarter of 2025, up from 24.8% a year earlier.

“For the first time in years, we’re seeing banks expand market share and reassert their presence in a growing and competitive market,” Melinda Zabritski, Experian’s head of automotive financial insights, says in a statement. “This shift counters many of the trends we observed in the post-pandemic era, where high interest rates and the re-emergence of new inventory allowed captives to push heavy incentives and capture significant market share.”

While banks gained ground, captives saw their share fall to 29.8% from 31.3% in Q1 2024. Credit unions posted slight growth, moving from 20.2% to 20.6% during the same time.

Despite the shift, captives still dominate new-vehicle financing, though their Q1 share dipped to 57.1%, down from 62.1% a year ago. Banks improved their position in this segment to 24.1%, up from 20.4% in Q1 2024. Credit unions' share rose from 9.6% to 10.9%.

For used-vehicle financing, banks led the way with a 28.4% share in Q1 2025, edging out credit unions at 28.2%. Captives' share fell from 8.5% to 7.4%.

Experian reports that 80.5% of cars sold in the first quarter of 2025 were new, and 43.3% were financed. The majority (56.7%) of the used cars sold (37.1% of total sales) were financed.

Another point to note: Super Prime (781-850 credit score) was the only risk tier to see year-over-year growth (30.5% in 2024 to 33.0% in 2025). It’s fair to hypothesize that the growth came from Super Prime customers buying ahead of tariffs, which many fear will increase consumers’ auto costs.

Signs of Stabilization

The report also shows signs that consumers are keeping up with their monthly payments. The 30-day delinquency rate dropped to 1.95%, down from 2.1% in Q1 2024. The 60-day delinquency rate remained stable at 0.83%.
Experian reports 14.5% of monthly new car payments – considering both lease and loan – are more than $1,000.

The largest share of lesees (26.5%) has monthly lease payments of $400 or less. The largest share of auto buyers (17.2%) has monthly loan payments of more than $1,000.
Zabritski says the numbers reflect broader financial behaviors.

“With many consumers receiving tax refunds and others exploring refinancing options, we observed some positive shifts in the automotive finance market,” she says. “Lenders and dealers will want to keep a close eye on how these trends evolve over the coming months and years ahead and adjust go-to-market strategies accordingly.”

Here’s Experian’s breakdown of some pertinent numbers:

Loan Amounts, Rates and Payments

• The average new-vehicle loan amount rose to $41,720, up $1,110 from last year.
• Monthly payments increased slightly from $737 to $745.
• New vehicles accounted for 43.3% of all financed vehicles, up from 40.9% in Q1 2024.
• Leasing rose to 24.7%, up from 23.7%.
• Nearly 10% of all new-vehicle transactions involved EVs, and nearly 60% of those were leases.
• New vehicles accounted for 43.3% of automotive financing in Q1 2025, up from 40.9% the previous year, while used vehicles made up the remaining 56.7%.
• New leasing experienced slight growth during the quarter, reaching 24.7%, up from 23.7%.

For used vehicles:

• The average loan amount climbed just $90, reaching $26,144.
• The average interest rate declined to 11.87% from 12.36%.
• Monthly payments dropped slightly, from $524 to $521.

For more information and Experian analysis, download the report.