Increase in Electric Vehicle Financing Indicates growing consumer interest: Experian (rephrased)
In a recent report published by Experian, the State of the Automotive Finance Market for Q3 2024, a growing interest in electric vehicles (EVs) among consumers has been highlighted. The report, released in early December, indicates that the EV sector is experiencing significant growth, with more consumers opting for leasing as their preferred method of acquisition.
According to the report, new EV financing accounted for more than 10% of all new vehicle financing in Q3 2024, marking a 30% increase from the same period last year. This surge in EV financing can be attributed to the EV tax credit and the introduction of more affordable EV models, as stated by Melinda Zabritski, head of automotive financial insights at Experian.
The report further reveals that leasing was the most popular method of acquiring a new EV in Q3 2024, a trend that hasn't been observed since 2019. Tesla was the most popular EV brand leased in Q3 2024, with the Model Y, Model 3, and the Cybertruck being the top three models consumers acquired. Remarkably, the Tesla Model Y accounted for nearly a third of all EV transactions during this period.
Interestingly, the most leased electric vehicle brand in Q3 2024 was BYD, although Tesla maintained its dominance in terms of overall popularity. The average monthly lease payment for new EVs was $198 less than the average monthly loan payment for new EVs, making leasing a more attractive option for many consumers.
Leasing rates for Teslas more than doubled from the previous year, and EV leasing incentives, such as discounts and rebates, have also contributed to making EV purchases more affordable, according to Zabritski.
However, the Experian report did not provide information on the change in financing for hybrids and plug-in hybrids in Q3 2024 compared to previous years. Additionally, the report did not provide information on the impact of the EV tax credit on leasing in Q3 2024 or the change in loan financing for EVs in Q3 2024 compared to previous years.
The report from credit bureau Experian relies on market intelligence databases on credit market trends, as well as dealers' loans and leases, to provide insights into the automotive finance industry. The findings suggest a positive outlook for the EV sector, with more consumers likely to consider electric vehicles as a viable and affordable option in the future.
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