Shades required: Bright summer ahead

As we head into the summer selling season at auto dealerships across America, it’s easy to get discouraged. There is continuing news of a chip shortage, which is impacting vehicle inventory.1 Reports also indicate unemployment crept upwards in April, with word that 29 percent of people who are jobless have been looking for work longer than a year.2

That’s all true. Some new car and truck models are hard to find, and some Americans are still hurting economically as a result of the pandemic.

At the same time, over the past year, Americans have made tremendous progress paying down debt.3 Writing in The Washington Post, personal finance columnist Mary Singletary said, “The share of “transactors” — or consumers who pay their credit card balances in full each month — reached an all-time high in the fourth quarter of last year, increasing to 35.1 percent.”

At the same time, Singletary said the American Bankers Association reported “the share of revolving accounts hit an all-time low, at 39.7 percent.” In the same article, she quoted Ted Rossman -- a senior industry analyst at and Bankrate -- who said, “It seems kind of odd to say, but the truth is that many people’s finances actually improved over this past year.”3

That improvement has already started allowing Americans to begin purchasing the vehicles they need to return to work, school and their pre-pandemic lives. Experian recently announced in its Q1 2021 State of the Automotive Finance Market report that “the automotive finance market saw strong performance during the first quarter.”4 The report said total open automotive loan balances increased from $1.168 trillion in the first quarter of 2020 to $1.288 trillion in the same quarter of 2021.

Americans who want or need cars in 2021 increasingly have the ability to buy them – either paying for them outright because of their improved financial conditions, or financing them due to their improved credit. Automotive News cited the Experian report last month and noted, “Average credit scores for new and used vehicle buyers rose in the first quarter.”5

That led Melinda Zabritski, Experian's senior director of automotive financial solutions, to offer this optimistic outlook for the auto finance sector in the months to come. "I don’t see anything in the industry itself that would be a cause for alarm," she said. 5

So, it appears auto sales are off to a strong start for the year and are ready to build on the success we saw in the first quarter. There can always be speed bumps ahead here and there. But it looks like consumer credit and personal finance trends are moving in the right direction, setting the stage for America’s auto dealerships and auto finance companies to have a solid summer of 2021.

1 White, A. (May 25, 2021). Report shows U.S. Automakers bearing brunt of chip shortage in North America. Car and Driver. Retrieved from:
2 Iacurci, G. (May 7, 2021). 29% of unemployed Americans have been jobless over a year. CNBC. Retrieved from: 
3 Singletary, M. (May 21, 2021). Millions of consumers paid down their credit card balances during the pandemic. Let’s keep this trend going. The Washington Post. Retrieved from:
4 Experian. (May 27, 2021). The Automotive Finance Market Continued to Move Forward at a Healthy Pace in Q1 2021, With Total Open Loan Balances Reaching $1.288 Trillion. Q1 2021 State of the Automotive Finance Market. Retrieved from:

5 White, J. (May 27, 2021). U.S. consumers borrow more for longer periods to drive trucks, SUVs. Automotive News. Retrieved from:

About Exeter
Exeter Finance LLC is a non-prime auto finance company headquartered in Irving, Texas. The company partners with franchised and independent auto dealers throughout the country to make car ownership a reality for consumers. For more information, call our Dealer Operations Group at 1-855-4EXETER (855-439-3837).

Category: Industry