Auto Loan Market Shifting Toward Less Risky Consumers
For the fourth consecutive quarter, auto loan originations in the second quarter decreased on a year-over-year basis. Much of that decline was driven a 5.9% decrease in subprime, nearprime, and prime loan originations.
CHICAGO — For the fourth consecutive quarter, auto loan originations decreased on a year-over-year basis in the second quarter. According to TransUnion, the 2.2% decline in originations was driven a 5.9% drop in subprime, nearprime, and prime loan originations.
The decline, however, was partially offset by a 3.2% increase in loans originated to the least risky consumers in the prime-plus and superprime risk tiers over the same period. As a result, 2.3 points of market share have shifted from subprime, nearprime, and prime to the prime-plus and superprime tiers.
“The recent decline in originations is due to the tightening of underwriting requirements and the slowing demand for new vehicles,” said Brian Landau, senior vice president and automotive business leader at TransUnion. “Despite fewer originations, there is evidence that more people will be opening auto loans in the near term.”
The evidence Landau was referring to is the increase in U.S. light vehicle sales in September, the first increase recorded this year. Additionally, demand for new vehicles as a result of the hurricanes in Florida and Texas is likely to result in a few thousand additional units sold this year, he added.
Overall loan balances in the third quarter grew 5.8% compared to a year ago. However, the rate of growth slowed to its lowest level since the third quarter of 2012. And as balance growth slowed, serious auto loan delinquency rates (60-plus day delinquent) have risen seven basis point in the last year to 1.40%.
“Through serious auto loan delinquency rates are slowly rising, we still do not believe this is a cause for concern,” Landau said. “The recent uptick in delinquencies was driven primarily by ‘relaxed’ underwriting standards from recent year, which drove nonprime origination growth.”
More F&I

Trust Is Personal
Technology, no matter how efficient, can’t replace what the human F&I manager can do, which is to bridge the divide between cyberspace and the in-store experience.
Read More →
Amplify 2026 Billed as Turning Innovation Into Results
Reynolds and Reynolds says its annual retail summit will connect dealers with practical strategies, peer insight, and technology-driven ideas.
Read More →
Own Your Outcome: F&I in the Digital Customer Journey
Finance has historically been the last step in the car-buying process, but it doesn’t have to be. The customer’s journey starts long before they arrive at the dealership, and so should F&I’s involvement.
Read More →
Tariffs Could Raise Insurance Premiums
As U.S. import tariffs affect repair costs, consumers might find it more affordable to replace a damaged vehicle, according to recent Insurify tariff analysis.
Read More →
Smaller Loans, Longer Terms
The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.
Read More →
New Lifetime Battery F&I Product Meant to Drive Dealer Traffic
EFG Cos. offering is intended to create lifetime auto dealer engagement with customers.
Read More →
The Psychology Behind Menus That Increase Add-On Sales
There is a science to crafting a menu that gives customers confidence in the choices presented, and moving the process outside the F&I office can further boost results.
Read More →
Why Your F&I PVR Is Misleading You
Here’s a handy checklist of the numbers to track in 2026 instead.
Read More →
Auto Consumer Anxiety Presents Opportunity
A survey of U.S. drivers found the majority are concerned about finances and the economy, but those fears make many ready to buy vehicle-protection products.
Read More →
Humble and Hungry: 12 Rules for an F&I Life
Dustin Gingerich, with a decade in the F&I business under his belt, shares his thoughts on leadership, building trust with customers, and the importance of learning and innovation.
Read More →