Reflecting the shift toward more creditworthy borrowers was the rise in average credit scores for both new- and used-vehicle loans. But the retreat from the high-risk tiers also comes during a quarter in which the average new-vehicle finance amount and monthly payment reached record highs.
In the first quarter of 2015, the percentage of automotive loans that fell within the subprime and deep subprime risk categories made up 19.7% of the market, the lowest share since 2012, according to Experian Automotive.
In the first quarter of 2015, the percentage of automotive loans that fell within the subprime and deep subprime risk categories made up 19.7% of the market — the lowest share since 2012, according to Experian Automotive.
The total outstanding balance on open automotive loans hit $886 billion in the fourth quarter of 2014, but subprime and deep subprime market share remained at low levels.
The percentage of new-vehicle loans made to credit-challenged car buyers was at 15.1% in the second quarter of 2014, down from 22.1% in the same period in 2013, according to Experian Automotive.
Experian Automotive reports that 84.5 percent of consumers used a loan or a lease to purchase a new vehicle in the second quarter, with leasing accounting for 27.64 percent of all new vehicles financed during the quarter.
Experian Automotive announced that the automotive loan market showed continued improvement, with interest rates for new- and used-vehicle loans at their lowest levels since 2008.
Below-prime auto loan originations continued to pick up steam in the third quarter, with the biggest gains seen in the two highest risk segments, Experian Automotive reported.
In the second quarter, finance sources continued their drive down into the high-risk credit tiers and consumers continued to pay on time. But the magazine’s resident finance insider wonders how long those trends can continue in this month’s review of quarterly auto finance trends.
Experian Automotive reports that the below-prime segment represented 22.29 percent of all loans originated in the second quarter, up from 18.21 percent in the year-ago quarter.
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