FI showroom red and grey logo
MenuMENU
SearchSEARCH

Subprime Originations Hit Record Low in Q3

Subprime financing fell to its lowest point since 2012, while prime grabbed the lion’s share of the auto finance space in the third quarter. Even the used-vehicle market has gone prime, with buyers outside of prime accounting for just a third of the market.

by Staff
December 7, 2017
3 min to read


COSTA MESA, Calif. — Total open auto loan balances in the third quarter grew 6.8% from a year ago to $1.121 trillion, but the big story coming out of the auto finance market during the period was the share of subprime financing falling to its lowest point since 2012, according to Experian Automotive.

Conversely, financing extended to car buyers with prime credit grabbed the lion’s share of the auto finance space during the period, accounting for 40.9% of the market. Registering the biggest increase, however, was superprime, which grew its share was from 19.42% in the year-ago quarter to 20.16%.

Ad Loading...

“For some time now, the story has been focused incorrectly on the rise in subprime lending. But the data over the last several quarters has shown that the entire market is growing, not just subprime,” said Melinda Zabritski, senior director of automotive finance for Experian. “The market turning more prime is an encouraging trend. It indicates that industry professionals are using data and analytics as part of the lending process, and consumers are taking a more active role in managing their credit before buying a car.”

The third quarter also saw loan terms continue to stretch, with the average term for new-vehicle financing reaching an all-time high of 69 months. Most borrowers taking advantage of longer terms, however, fell into the prime segments, with buyers outside of prime accounting for only 10.74% of the new-vehicle market — a 4.3% decrease from a year ago.

The move toward prime drove up the average credit score for new-vehicle financing two points from a year ago to 716. Even the used-vehicle financing space registered an increase in its average credit score, which increased four points from a year ago to 659.

The used-vehicle space was indeed dominated by prime and superprime buyers, accounting for 48.83% of that market. Buyers with credit outside of prime accounted for just a third of the market (31.34%), with deep subprime’s share falling by 9.2% from a year ago to an all-time low of 4.64%.

“It’s clear that affordability is a driving force in a consumer’s decision to finance a vehicle, and the data shows that consumers are focused on doing what they need to do to reduce monthly payments and obtain the right vehicle that fits their needs, whether it’s buying new or used,” Zabritski said.

Ad Loading...

Past Experian reports have shown that consumers often choose leasing to reduce monthly payments. This quarter’s report, however, showed a slight decrease in leasing across all risk categories. The only exception was the super-prime category, which increased by 1.8%.

The average amount financed for new vehicles in the third quarter was $30,329, up $291 from the year-ago quarter. For used vehicles, the average amount financed increased by $56 from a year ago to $19,291. As for monthly payments, the average new-vehicle payment increased by $6 from a year ago to $502. For used, the average payment increased by $3 to $365 per month.

Lease payments were also on the rise, increasing by $6 from a year ago to $412.

As for lending segments, banks continued to lead the way in terms of market share despite their share falling 6.3% from a year ago to 32.9%. Credit unions and captive lenders increased their share 6.9% and 35.1% from a year ago to 21% and 29.8%, respectively. Finance companies saw their share fall from 10.7% in the year-ago period to 10.2%.

More F&I

Photo of a keyring with mltiple keys, including a car key fob, on a white surface
F&IJuly 15, 2026

Integrating Nontraditional F&I Products

The niche presents a strategic advantage for auto dealerships as they move to adapt to fast-changing consumer expectations in today’s market.

Read More →
Photo of businessman's hands holding eyeglasses at a desk
F&Iby Rick McCormickJuly 7, 2026

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 →
Photo of executive in a sports coat and glasses
Industryby StaffJuly 2, 2026

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 →
Ad Loading...
Woman standing on stage smiling.
F&Iby Lauren LawrenceJuly 1, 2026

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 →
$100 bill and magnifying glass on top of paper that says insurance policy terms and conditions.
F&Iby Lauren LawrenceJune 29, 2026

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 →
Red toy car sitting on top of coins.
Auto Financeby Lauren LawrenceJune 24, 2026

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 →
Ad Loading...
Under the hood of a Toyota Prius EV Hybrid car.
F&Iby StaffJune 15, 2026

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 →
Several illustrations of question marks on a surface
F&IJune 10, 2026

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 →
Man holding magnifying glass over sales volume paper.
F&IMay 29, 2026

Why Your F&I PVR Is Misleading You

Here’s a handy checklist of the numbers to track in 2026 instead.

Read More →
Ad Loading...
Photo of woman typing on a laptop as she sits on a couch
F&Iby Hannah MitchellMay 29, 2026

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 →