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What bubble?

Subprime vehicle loans

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.

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