Experian Automotive’s Q3 State of the Auto Finance Market Report finds EVs were leased at a significantly higher rate than a year ago, setting the stage for a future disruption to the used car market.

Leases accounted for 23.4% of all U.S. new vehicle transactions, down slightly from 24.2% a year ago. But EV leasing surged in Q3 as the Sept. 30 expiration of a $7,500 federal tax credit loomed: 56.7% of new EVs were leased, up from 46.4% in the year-ago quarter; purchases fell from 43.2% of the market to 31.1%.

“With the EV tax credit expiring at the end of September, industry analysts expected an acceleration in EV activity during the third quarter,” writes Head of Automotive Financial Insights Melinda Zabritski in a release. “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.”

Banks continued to gain auto finance market share after taking the No. 1 spot in Q2, accounting for 28.9% of all loans and leases, followed by captive finance companies (26.2%) and credit unions (21.1%). Captives accounted for 52.9% of new vehicle financing, with banks at a distant second (27.2%).

The average amount financed for a new vehicle purchase increased by 3.4% to $42,332 on a year-over-year basis, with an average monthly payment of $748, up 1.8% from $735 in Q3 2024. Used car buyers financed an average of $27,128 (up 3.1%) with a $532 monthly payment (up 1.5%).

Over the past five years, prime credit borrowers have grown from 27.8% of all loan originations to 33.6%. That growth coincides with a 10-point increase in the average credit score for approved new vehicle financing, from 744 in Q3 2020 to 754 in Q3 2025.

Read the full report at Experian