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Demand High, Approval Rates Low for Subprime

September 28, 2010

BANDON, Ore. — The latest figures from CNW Research indicate that car buyers with FICO scores below 619 are still having a tough time obtaining new and used financing.

The market research firm stated that only one-third of used-car shopping with subprime credit were approved for loans in August. In August 2007, the opposite was true, and new-car loans for subprime buyers were approved at a rate nearing 80 percent. Last month, fewer than 40 percent of loans for subprime buyers were approved, according to CNW’s figures.

In August, less than 9 percent of new-car sales and more than 20 percent of used-car sales were represented by subprime buyers. In the same month in 2007, those figures stood at 15 percent and just over 32 percent, respectively. That year closed with 2.1 million new-car sales and 14.4 million used-car sales to subprime buyers. Based on sales to date, CNW stated that 2010 could close with fewer than one million new cars and only 6.1 million used cars sold to subprime buyers.

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