Consumer Bankers Association's 2003 Auto Finance Study; Study Shows Tighter Approval Standards

    ATLANTA--May 5, 2003--BenchMark Consulting International, a process management operations consulting firm, announced the results from the Consumer Bankers Association's (CBA) 2003 Automobile Finance Study, revealing that lenders tightened underwriting standards on automobile loans in 2002, and reported lower delinquencies and loan losses for the year.
    The influence of credit tightening was evident in a seven percent increased average credit score for booked loans. Average new and used booked loan bureau credit scores were reported at 716 this year vs. 668 last year. Leases had only a one percent (711 this year vs. 704 last year) credit score increase year-over-year.
    All 53 respondents reported an overall average decline in originations of five percent year-over-year, although 2002 did represent the fourth highest sales year ever. Despite these factors, the consumer is currently "in the driver's seat." Ted Brown, Automotive Finance Practice Manager for BenchMark Consulting International, which conducted the survey, said, "The battle for market share along with incentive deals and low interest rates have provided consumers with great deals. It's a great time to get a new vehicle."
    The survey indicates that credit policies influenced rebate decisions and found that rates charged on these loans were higher at captive finance companies (those owned by or under the control of carmakers) than at banks.
    This change to expectation was based on the more restrictive credit requirements with zero percent financing. Additionally, loan application approval rate trends declined year-over-year on a "weighted average" basis, reflecting a tightening of credit standards.
    Dollar delinquencies retreated from the previous levels for both new and used vehicles reported in 2002. Surprisingly, gross and net credit losses were also reported as lower for new vehicles. However, used vehicles, as expected, reported higher charge-off levels.
    The average new loan size increased from $20,656 to $21,779 or about a five percent increase, while the mean used vehicle loan size increased 12 percent from $14,707 to $16,542 in 2002.
    New and used vehicle loans continue to trend toward longer maturities. New vehicle loans 49 months or longer accounted for almost 84 percent of respondents' originations this year. Used vehicle loans 49 months or longer accounted for 78 percent of respondents' originations, an increase of four percent over 2002.
    New vehicle delinquencies (greater than 30 days past due) decreased in 2003 reversing a prior three-year upward trend. New vehicle loan dollar delinquencies decreased to 1.58percent in 2003 compared to 2.18 percent in 2002. New vehicle account delinquencies followed the same pattern with a declining trend of 1.73 percent from the previous year's reported high of 2.5 percent.
    Complimentary copies of the survey are available to the press for review. The price of the study is $300 for CBA members and $495 for non-members, and information on ordering is available at www.cbanet.org.

    About the Consumer Bankers Association

    CBA was founded in 1919 and provides leadership, education, research and federal representation on retail banking issues such as privacy, fair lending, and consumer protection legislation/regulation. CBA members include most of the nation's largest bank holding companies as well as regional and super community banks that collectively hold two-thirds of the industry's total assets.

    About BenchMark Consulting International

    BenchMark Consulting International has specialized in improving the financial services industry since 1988. The company is a management consulting firm that improves the profitability of its financial services customers through the delivery of management decision making information and change management services to realize the benefits of business process changes. BenchMark Consulting International's expertise is in the designing, managing and measuring of operational processes.
    As of 2002, the firm has worked with 19 of the top 20 (in asset size) commercial banks, all 11 automobile captive finance corporations, several of the largest consumer finance corporations and many regional banks throughout the United States. Internationally, BenchMark Consulting International has worked with the five largest Canadian commercial banks, more than 20 European organizations in eight different countries, in addition to financial institutions in Latin America and Asia.
    The company is a wholly owned subsidiary of Fidelity National Financial, Inc., a provider of products, services and solutions to the real estate and financial services industries. BenchMark Consulting International has dual headquarters in Atlanta, Georgia and Munich, Germany.
    For more information about the company, visit the Web site at www.benchmarkinternational.com.