 TITLE: Do More People Finance Auto Loans at a Bank or Dealership? CONTENT: Where Are People Financing Their Auto Loans?\n--------------------------------------------\nAlthough banks, credit unions and outside finance companies accounted for more loans and leases overall in the Q2 2020 data, financing a new or used vehicle at the dealership is growing in popularity, reaching 31.1% last quarter. Just a year earlier, captive financing represented just 28.6% of car purchases and leases, versus 64.7% for banks, credit unions and finance companies—a roughly 11% increase in market share.\nA closer look at new car financing may help to explain the trend. Among new car loans and leases, captive financing originating at the dealership dominated: 61.2% of new car loans and leases were made this way. Banks captured 23.9% of the market and credit unions only 10.2%. One reason might be strong incentives for financing at the dealership, including zero-percent financing or rebates.\nThe same kind of captive dealership-based financing—often backed by manufacturer-branded finance companies like Ford Credit or Toyota Financial Services—is not as dominant in the used car marketplace. Here, banks (34.8%) and credit unions (24.9%) financed a larger share of used car loans and leases than dealers did. But notably, \"buy here, pay here\" dealerships catering to buyers with bad credit (more on these later) represented a solid 13% of used car financing. END