The average vehicle age in the U.S. continues to climb, yet lenders have little to worry about, analysts said.

The average age of light vehicles in operation has risen to 11.8 years, thanks to better technology and overall vehicle quality improvements, Mark Seng, director of IHS Markit‘s global automotive aftermarket practice, said in a press release.

Despite the notion that an aging vehicle fleet translates to slower vehicle sales, 11 year-old-vehicles are rarely financed, said Cox Automotive Chief Economist Jonathan Smoke.

“The rising average age of vehicles on the road has created a market where turnover is declining, but that doesn’t mean that lending is on the decline,” Smoke said. “Instead we’re seeing continued growth in used retail sales that are increasingly younger and more expensive vehicles that are being financed.”

Likewise, Edmunds Senior Manager of Industry Analysis Ivan Drury pointed out that population growth will offset aging vehicles. “As our population grows, more shoppers are introduced to the buying pool,” he said. “This should further help balance things out.”

IHS Markits’s Seng said the 40% drop in new-vehicle sales due to the recession “created an acceleration in average age like we’ve never seen before.” He said during that time, the average age of light vehicles increased more than 12%. Since then, the average age has returned to a more traditional rate of increase – 4% in the past five years.

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Used-vehicle sales volume is expected to plateau over the next two years, according to Manheim’s Wholesale Market Insights report released today.

Volume is expected to drop to 39.2 million units by yearend 2019 — from 39.4 million last year — and then fall to 39 million in 2020, Manheim predicted.

Used-car sales volume in June dropped 3% year over year, falling to a pace of 39.8 million units. The report notes, however, that June 2018 posted unseasonably high sales volume due to an increase in consumer demand fueled by tariff fears and rising interest rates.

Following new-car prices, used-vehicle prices for June were up 4.1% year over year. In fact, Manheim’s report shows that all major segments saw a year-over-year price increase in June, with midsize cars and pickup trucks leading the charge with increases of 4.8% and 5.3%, respectively. Luxury vehicles also saw an uptick in price, despite a slow start in the first five months of the year.

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Consumer Portfolio Services is customizing the messages dealers see when they submit loan applications, as part of a new deal structuring portal unveiled in mid-June.

“A lot of the messaging we were sending was really outdated, not really applicable, and boilerplate about our program,” said Curt Powell, senior vice president of sales. “Dealers didn’t pay much attention.”

Now, CPS shows dealers options that apply to the specific deal submitted, like offering a service contract or gap insurance. “Rather than say here’s four messages that apply to every deal, we say, ‘This particular application has these characteristics, therefore we’re going to respond with these more specific responses that apply more to that situation,’” Powell explained.

Also read: CPS debuts AI-powered deal structuring portal

Another element of the new portal is called maximum payment feature, which tells dealers the maximum amount for which a consumer can be approved.

“Dealers tend to be of the mindset that a lender is more likely to approve a $300 payment for a weak customer than a $500 payment,” Powell said. Because of that, dealers might send several payment structures in the $300 range, “crossing their fingers that the deal gets approved,” he added.

“They were kind of running blind,” Powell said, unaware that they might be able to get the customer approved for a $400 or $450 payment. “There’s a lot of back and forth, so posting that maximum payment helps a lot,” he added.

The messaging revamp was triggered by dealer feedback received through CPS’s sales reps.

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