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Electric Vehicle (EV) Financing Gains Momentum as the EV Tax Credit Comes to an End, According to New Data From Experian Automotive

via Business Wire

More than 50% of consumers are opting to lease a new EV, and EVs account for 1-in-4 new leases

With the electric vehicle (EV) tax credit expiring at the end of September, the market observed an increase in EV finance transactions in the third quarter of 2025. According to Experian’s (LSE: EXPN) State of the Automotive Finance Market Report: Q3 2025, EV share of new vehicle financing reached 11.36%, up from 10.14% the previous year.

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Experian’s State of the Automotive Finance Market Report: Q3 2025

Experian’s State of the Automotive Finance Market Report: Q3 2025

Perhaps unsurprisingly, with the expiration of the EV tax credit, the percentage of EV leasing grew significantly in Q3 2025. More than 56% of consumers opted to lease a new EV during the quarter compared to just over 46% a year ago. To better understand how the surge in EV leasing impacted the broader market, in Q3 2024, EVs made up less than 18% of the total new lease market. As of Q3 2025, EVs accounted for 1-in-4 new leases.

Interestingly, EVs represented four of the top ten leased models, with Tesla Model Y (4.35%) and Tesla Model 3 (2.58%) accounting for the top two. Meanwhile, the Honda Prologue (1.78%) was the fifth most leased model, and the Hyundai IONIQ 5 (1.49%) was the ninth.

“With the EV tax credit expiring at the end of September, industry analysts expected an acceleration in EV activity during the third quarter,” said Melinda Zabritski, Experian’s head of automotive financial insights. “While most experts are closely watching how consumer interest in EVs evolves over the coming months and years ahead, we can’t lose sight of how the uptick in leasing will shape the market dynamic as these models come off lease and enter the used space.”

Overall finance trends reflect current state of the vehicle market

In the third quarter of 2025, the average interest rate for a new vehicle declined to 6.56%, from 6.65% in Q3 2024. Meanwhile, the average loan amount increased $1,378 year-over-year, reaching $42,332 during the quarter, and the average monthly payment increased from $735 to $748 in the same period.

On the used side, the average interest rate decreased to 11.40% in Q3 2025, from 11.86% last year. However, the average loan amount went up $825 from last year to $27,128 and the average monthly payment slightly grew from $524 to $532 during the same period.

With the average loan amount for new and used vehicles increasing, data showed growth in the longer loan term distributions. For instance, the percentage of new vehicles with 73- to 84-month loan terms increased to nearly 30%, up from just over 27% a year ago. Similarly, the percentage of new vehicles with loan terms of more than 85 months reached 2.31%, up from 1.83% over the same period. Meanwhile, the percentage of used vehicles with 73- to 84-month loan terms increased to 27.22%, from 25.77% the previous year, and the percentage of used vehicles with loan terms more than 85 months reached 1.06%, up from 0.95% over the same period.

“Consumers tend to shop for vehicles based on monthly payment,” Zabritski continued. “Although we’re beginning to see interest rates slowly decline, affordability remains top of mind for many shoppers. It’s not surprising to see some shoppers explore the idea of extending loan terms to secure a lower monthly payment.”

Additional findings for Q3 2025:

  • Banks remain the leader for total automotive financing market share in Q3 2025 at 28.91%, followed by captives (26.20%) and credit unions (21.10%).
  • Thirty-day delinquencies increased to 2.45% in Q3 2025, from 2.39% in Q3 2024, while 60-day delinquencies slightly grew from 0.92% to 0.96% over the same period.
  • New vehicle financing grew during the quarter, reaching 43.27%, up from 41.74%. Meanwhile, used vehicle financing declined from 58.26% to 56.73%.
  • The average monthly savings when refinancing a vehicle has consistently grown since 2023, reaching $77 in Q3 2025.
  • CUVs and SUVs continue to comprise the majority of new vehicle financing at 63.59%, from 62.87% last year. On the contrary, sedans declined from 16.15% to 14.63% over the same period.

To learn more, watch the entire State of the Automotive Finance Market Report: Q3 2025 presentation on demand.

About Experian

Experian is a global data and technology company, powering opportunities for people and businesses around the world. We help to redefine lending practices, uncover and prevent fraud, simplify healthcare, deliver digital marketing solutions, and gain deeper insights into the automotive market, all using our unique combination of data, analytics and software. We also assist millions of people to realize their financial goals and help them to save time and money.

We operate across a range of markets, from financial services to healthcare, automotive, agrifinance, insurance, and many more industry segments.

We invest in talented people and new advanced technologies to unlock the power of data and to innovate. A FTSE 100 Index company listed on the London Stock Exchange (EXPN), we have a team of 25,100 people across 32 countries. Our corporate headquarters are in Dublin, Ireland. Learn more at experianplc.com.

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