F&I data: Santander study finds pent-up auto demand, need for lower payments

A February Santander Consumer USA survey found 55 percent of middle-class customers had delayed a vehicle purchase during the last 12 months because of cost, an increase of 5 percentage points from the previous survey in the fourth quarter of 2023.

Twenty-four percent of those postponing a car deal needed payments to drop by $100 to rejoin the market, and 19 percent needed payments to drop by $200, according to Santander's study. The bank polled 2,211 financial services customers with household incomes of about $50,000 to $148,000 in February.

The average first-quarter new-vehicle monthly payment was $735, and the average used-vehicle payment was $546, according to Edmunds.

Santander's February polling also found growth over the last survey in the proportion of consumers considering buying a vehicle within the next year.

Betty Jotanovic, president of auto relationships and Chrysler Capital at Santander, said at the Auto Finance Summit on May 2 these statistics indicated pent-up vehicle demand and a payment barrier that would collapse as vehicle prices normalize and automaker incentives grow.

Vehicle shopping also appeared in middle-class consumers' February plans for their tax refunds. Fourteen percent of respondents expecting a tax refund told Santander they expected to spend that money on a "large purchase." Among that group, 31 percent planned to buy a vehicle.