LendingTree Study Indicates Subprime ‘Auto Bubble’ Unlikely
A new study from LendingTree contradicts media claims of a subprime bubble. It shows that finance sources are not taking part in risky lending practices despite growing subprime originations.
CHARLOTTE, N.C. — According to a new study from LendingTree, lenders are not necessarily taking part in the risky lending practices that could lead to a bubble as some reports claim, although they are originating a larger number of subprime loans.
The study analyzed the credit scores of subprime auto loan borrowers for loans originated in 2014. LendingTree found that over the one year period ending December 31, 2014, the monthly average of borrower credit scores for loans closed by LendingTree's network of lenders increased by 10 points. The monthly median credit score of those closed by network lenders rose by 12 points.
If industry lenders were taking on substantially higher risk, the data would likely reveal lower credit standards needed for approval, with approved aggregate credit scores declining over time. Instead, LendingTree data shows an upward trend, suggesting lenders are potentially being more selective within the subprime segment.
"Our data does not substantiate the likelihood of an upcoming crisis," stated Rick Finch, general manager of LendingTree Autos. "While the current concern over subprime auto loans that end up defaulting is reminiscent of the mortgage meltdown stemming from mortgage backed securities, the defaults are being monitored and controlled by the lending market. Although auto backed securities increasingly contain subprime loans, loan defaults are not rising at a rate that signal imminent danger."
Wells Fargo, one of the largest subprime auto lenders, recently announced it would now place a dollar volume cap on its subprime auto loans, with these originations limited to 10% of the bank's overall auto loan originations, which totaled $29.9 billion last year. This could be a signal of a larger cooling trend within the subprime auto loans segment. Since the financial mortgage crisis, Wells Fargo has developed a positive reputation for risk management, and its current actions could be followed by other major auto loan lenders. This would indicate lenders are aware of the market risk and are taking preventative measures against a bubble.
In another recent release by Equifax, one of the three major consumer credit bureaus, Equifax also refuted the impending subprime auto bubble instead citing borrowers who originated a subprime auto loan had a median consumer credit score increase of 52 points over a three-year time period. Auto lenders have better tools today with more data and technology to assist them in making safer decisions.
"The mentality of someone paying for a car is different than someone paying a mortgage. The inability to afford a mortgage and losing a house results in the consumer looking for more affordable housing in the rental market, or seeking friends or family for help,” Finch said. “Missing car payments affects one's ability to get to work and continue earning a paycheck. People are more likely to make auto payments a priority based on need, and most seek to remedy car financing issues quickly."
More F&I

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 →
Focus on the Opening
F&I managers must learn as much as possible about their customers, starting before they walk into their offices. The bulk of today’s consumers expect that, and good results will follow.
Read More →
F&I Reaches for the Sky
The increasingly important profit center continued making gains in the first quarter, according to StoneEagle data, ancillary products proving more popular as consumers hold onto their buys longer.
Read More →
Timing the Market Can Hurt Long-Term Program Performance
For dealer-owned reinsurance entities, avoiding volatility entirely can mean falling behind inflation and missing market rebounds that drive long term surplus growth. Missing just a handful of strong market days can materially impact cumulative returns—an important reminder for long horizon trust and investment strategies.
Read More →
The 90/10 Rule
In this video, Ryan Ruff explains the rule that elite sales professionals use to turn ordinary conversations into unforgettable customer experiences.
Read More →
Your Office Is Talking
What’s the atmosphere saying about you to your customers? You can make minor adjustments and additions that transform your space into one that creates trust with the people on the other side of the desk.
Read More →
F&I Training Fundamentals
How can auto dealerships help F&I managers fulfill their vital role in the most effective ways? Industry expert Rick McCormick shares his insights on the best ways to train these professionals and help them maintain good habits.
Read More →
Not Just Any Tire Will Do
More consumers and businesses are opting for all-season options for various reasons as safety, sustainability and convenience push practical change.
Read More →