Pickups Pose Auto Lender Growth Opportunities Next 24 Months

Compact, mid-size, and full-size pickups have all enjoyed strong retention during the past 12 months and are expected to continue to outperform during the next 12-24 months, offering a strong growth opportunity for auto lenders looking to expand their portfolios.

by Staff

July 17, 2013

2 min to read

Black Book Lender Solutions analyzed historical vehicle segment data and has developed projected retention levels for the next 12 to 24 months. Below is the breakdown of projected retention across all 24 segments, with analysis of the segments expected to outperform and underperform.

Pickups Remain Strong

“Pickups are expected to remain strong for auto lenders during the next two years particularly since the service industry is picking up from an economy that wants to improve,” said Jeff Bunch, VP of Black Book Lender Solutions. “There continues to be low supply due to manufacturer cutbacks in those segments during the downturn.”

Premium Sporty Cars will outperform the average vehicle retention rates over the next 12-24 months because of less supply currently in the market.

Crossovers Less Competitive Than SUVs

Full-Size CUVs -- such as the GMC Acadia, Buick Enclave, Ford Flex, and Cadillac SRX -- will also outperform average retention. Consumers are replacing full-size SUVs with vehicles in this segment, which also has low supply and is less competitive than the SUVs.

Entry-Level Cars & Mini Vans To Underperform

Entry-Level Cars are projected to underperform average retention levels in the next 12-24 months. Vehicles in this segment include the Chevrolet Aveo, Honda Fit, Toyota Yaris, and Hyundai Accent. Fuel prices have remained steady and greater fuel efficiency from mid-size segments is pulling customer demand.

Passenger Minivans are also projected to underperform in the near term as the popularity of crossover segments pull more customer demand and vehicle replacement.

Here is the complete segment breakdown according to Black Book Lender Solutions:

Segment	Average of past 12 month retention	Average of 12m retention	Average of 24m retention
Full-Size Pickup	95.22%	80.47%	68.85%
Mid-Size Pickup	94.97%	81.55%	70.13%
Compact Pickup	94.78%	81.73%	71.09%
Full-Size Van Cargo	90.97%	76.07%	62.52%
Compact SUV	90.83%	79.88%	67.73%
Full-Size Vans Wagon (Pass)	90.31%	77.30%	63.63%
Full-Size SUV	88.52%	79.19%	65.66%
Minivan Cargo	87.95%	78.65%	64.31%
Mid-Size SUV	87.76%	80.49%	66.61%
Luxury SUV	86.87%	80.56%	67.28%
Sporty Car	86.31%	80.85%	68.50%
Compact CUV	85.76%	81.05%	67.86%
Mid-Size CUV	85.37%	80.38%	67.47%
Luxury Level Car	85.22%	80.21%	66.48%
Premium Sporty Car	85.06%	82.08%	69.28%
Near Luxury Car	84.10%	80.03%	66.63%
Full-Size Car	84.01%	81.04%	68.41%
Prestige Luxury Car	83.31%	79.90%	65.74%
Minivan Wagon (Pass)	83.22%	78.04%	63.90%
Full-Size CUV	82.95%	82.60%	69.47%
Upper Mid-Size Car	81.95%	80.90%	67.71%
Entry Level Car	81.23%	77.91%	64.75%
Compact Car	80.86%	80.62%	67.62%
Entry Mid-Size Car	78.22%	80.02%	66.36%
Grand Total	85.90%	80.25%	67.19%