When discussing automotive lending, it seems like one term is on everyone’s lips: “subprime auto loan bubble.” But what is the data telling us?
- Subprime auto lending reached a 10-year record low for Q1.
- The 30-day delinquency rate dropped 0.5% from Q1 2016 to Q1 2017.
- Super-prime share of new vehicle loans increased from 27.4% in Q1 2016 to 29.12% in Q1 2017.
The truth is, lenders are making rational decisions based on shifts in the market. When delinquencies started going up, the lending industry shifted to more creditworthy customers — average credit scores for both new and used vehicle loans are on the rise.