Critical Shifts:
-
$145B+ Economic Driver: Auto financing and personal lending generate over $145B annually, contributing $125.5B directly to U.S. GDP and supporting 840,000 jobs.
-
Vital for Independent Dealers: Flexible lending (prime and subprime) is the primary engine moving used car inventory amid elevated vehicle prices.
-
Massive Volume: Lenders originated 30.2M vehicle loans/leases totaling $727B, alongside $62B in personal loans for credit-challenged buyers.
-
Top Regional Markets: Texas and California lead the nation, combined generating over $36B in GDP impact.
_________________________________________________________________
Access to vehicle financing continues to play a major role in keeping independent car dealerships selling vehicles and helping consumers afford reliable transportation. A new study from the American Financial Services Association (AFSA) and Oxford Economics found that auto financing and personal lending generate more than $145 billion in annual economic activity across the U.S., supporting nearly 840,000 jobs. For used car dealers, the research highlights how strong lending options remain critical to used vehicle sales, especially as more buyers rely on financing to purchase pre-owned vehicles.
For independent dealerships, the findings reinforce what retailers have experienced for years: access to financing is one of the biggest factors influencing vehicle sales. As affordability challenges continue to push more consumers toward pre-owned vehicles, finance companies remain essential partners in keeping dealership inventory moving.
Vehicle Financing Delivers $125.5 Billion Economic Impact
According to the study, vehicle financing contributed $125.5 billion to U.S. GDP in 2023, supporting approximately 680,000 full-time jobs while generating $24.6 billion in federal, state, and local tax revenue.
Finance companies originated 30.2 million vehicle loans and leases totaling $727 billion, highlighting the scale of financing activity that supports dealerships, lenders, wholesalers, auctions, service providers, and related automotive businesses.
"The spillover effect of vehicle sales and financing is significant across the United States and extends well beyond the vehicle manufacturers, dealers and lenders," said Tim Gill, Chief Economist for AFSA. "At every level of the vehicle, dealer and lender supply chain, there are communities, businesses large and small and consumers who both directly and indirectly benefit economically."
For independent and franchised used car dealerships, these numbers underscore the importance of maintaining strong relationships with finance companies that serve both prime and non-prime buyers.
Subprime Lending Continues to Support Vehicle Buyers
The companion study found that personal lending by finance companies contributed $20.4 billion to U.S. GDP, supported 159,000 jobs, and generated $4.9 billion in tax revenue.
Finance companies originated 12.5 million personal loans worth $62 billion, with many loans serving lower-income and subprime consumers who often have limited access to traditional bank financing.
That lending activity has implications for used car dealers, particularly independent dealerships that frequently serve customers with challenged credit profiles. As affordability remains a concern, access to responsible financing can help expand the pool of qualified vehicle buyers.
AFSA President and CEO Celia Winslow said the research demonstrates that responsible consumer lending not only helps individuals access needed credit but also powers economic activity nationwide.
Texas and California Lead the Nation
The research found Texas and California experienced the largest combined economic impacts from vehicle financing and personal lending.
- Texas: $21.3 billion economic impact
- California: $15.3 billion economic impact
Together, the two states accounted for more than $36 billion in GDP impact.
AFSA also reported that 40% of all vehicle financing by value originated in five states:
- Texas
- California
- Florida
- New York
- Georgia
On a per-capita basis, Texas, Florida, and New Hampshire recorded the highest levels of vehicle loan activity.
Meanwhile, 13% of all personal loan value nationwide originated in Texas, reflecting both strong consumer demand and a robust financial services market.
What It Means for Independent Auto Dealers
The study highlights several trends that could shape dealership operations:
- Vehicle financing remains a major contributor to used vehicle sales.
- Strong lender participation helps dealerships reach more buyers, particularly consumers facing affordability challenges.
- States with high financing activity continue to represent significant opportunities for dealership growth.
- Finance companies remain essential partners for independent dealers serving non-prime and subprime customers.
- Continued availability of vehicle financing supports dealership profitability by helping convert shoppers into buyers.
As used vehicle prices remain elevated compared to historical levels and affordability continues to influence purchasing decisions, dealership access to multiple financing sources will likely remain one of the industry's most important competitive advantages.
The findings are based on two studies conducted by Oxford Economics for the American Financial Services Association, examining the economic impact of vehicle financing and personal lending across all 50 states.
