Electric vehicles take a larger share of auto loans in the fourth quarter
The share of electric vehicles in auto financing roughly doubled in the fourth quarter of 2021, compared to a year earlier, as electric vehicle offerings grow among the most common brands and in more product segments, explains Experian Automotive.
“The share has doubled year over year. Of course, that’s with a wider variety of vehicles and a bit more affordability,” says Melinda Zabritski, senior director of automotive financial solutions at Experian Automotive. .
The EV share of loan and lease originations in the fourth quarter was around 4.6%, compared to 2.3% in 2020. Even with the increase, the Tesla brand still dominates the segment and the average price remains high for electric vehicles, Zabritski told Wards.
According to Experian, the average monthly loan payment for an electric vehicle in the fourth quarter was $744, up slightly from $738 a year ago. However, the trend in recent years has been towards lower payments on electric vehicles. In the fourth quarter of 2017, the average monthly payment for an EV was $977.
Average lease payments for electric vehicles show the opposite trend. At just $281 four years ago, lease payments averaged $688 in Q4 2021, almost as much as the overall average loan payment.
That likely reflects declining rental incentives, Zabritski says.
For the industry as a whole, the average monthly loan payment for a new vehicle was $644 in the fourth quarter, down from $579 a year ago.
“With supply and demand, incentives are kind of not needed,” she says. “Renting is down overall.”
For the entire US market, leasing accounted for 23.8% of new vehicle creations in the fourth quarter, compared to 27.7% a year ago. For electric vehicles, leasing fell to 27.7% in the fourth quarter from 31.8% a year ago, according to Experian.
Three Tesla models accounted for more than 75% of EV loans and leases in the fourth quarter: Model 3, at 36.6%; Model Y at 34.2%; and the Model S, at 5.3%. The Ford Mustang Mach-E, at 6%, and the Volkswagen ID.4, at 3.4%, make up the rest of the Top 5 most funded electric vehicles, according to Experian.