Subprime Loan Percentage Falls to Lowest Level in Three Years
SCHAUMBURG, Ill. — In 2015’s first quarter, 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 firm’s State of the Automotive Finance Market report for first quarter 2015 found that subprime loans made up 16.2% of the market, while deep subprime loans captured 3.5%.
“Over the last year, there has been a tremendous amount of conversation around the growth in subprime loans, and the concern over the automotive finance industry approaching a potential ‘bubble,’” said Melinda Zabritski, senior director of automotive finance for Experian. “While it’s true that the volume of subprime loans is up, the same can be said for the rest of the risk categories. It’s important to keep in mind that, while we should continue to watch them, the percentage of subprime loans make up a small portion of the market.”
Findings from the report also showed that automotive lenders continued to grow their overall portfolios, as total outstanding balances for automotive loans reached a record-high $905 billion in the first quarter 2015, up 11.3% from a year ago.
Additionally, despite an increase in the numbers of loans put into play, both 30- and 60-day delinquencies saw slight decreases in the first-quarter report. Thirty-day delinquencies were down 4.1% from a year ago, while 60-day delinquencies dropped 3.2% over the same time period.
“The current stability in the automotive loan market is a testament to consumers making timely payments on outstanding loans, which is evident in the improvement in delinquency rates,” continued Zabritski. “While the market is in a positive position right now, dealers and lenders will want to want to keep an eye on these data sets and use them for the good of their business, as the insights enable them to make better decisions in terms of loan terms and interest rates.”
At a state level, the highest delinquency rates were found primarily in the South, while the states with the lowest rates were typically found in the Midwest and Northwest.
More Industry

Ownership Priorities are Shifting
A new survey shows that in the U.S. vehicle quality for generation Z is largely defined by advanced safety features, intuitive technology and premium sound systems.
Read More →
Pump Price Jump Calculated
ISeeCars.com examined fuel costs for different power trains, finding which ones have experienced the biggest hits since the war in Iran commenced.
Read More →
Black Book: Weekly Market Update
Wholesale values fell last week despite the spring season still being in the traditional full-gear mode, analysts said.
Read More →
Arkansas Auto Group Acquires First Indiana Rooftop
Performance Brokerage Services represented both the buyer and seller in the sale of Carver Toyota of Columbus by Carlock Automotive Group.
Read More →
Stellantis to Dive Into U.S. Lending
The multinational maker of Chrysler, Dodge, Jeep, Ram and multiple other brands received conditional approvals for a Utah-based industrial bank.
Read More →
New-Vehicle Prices Rise
With April sales down, higher prices on in-demand large vehicles helped inflate the overall ATP, though increases were under long-term averages, Cox Automotive reported.
Read More →
Black Book: Weekly Market Update
Last week in the wholesale automotive market proved to be a mixed bag, analysts reported.
Read More →
Black Book: Weekly Market Update
Conversion rates were flat last week at 63%, Black Book analysts calculated, as low-mileage and almost-near units outpaced the overall market.
Read More →
EU Auto Association Urges Action
Trade relations between the European Union and the U.S. are at risk, causing the European Automobile Manufacturers Association to push lawmakers to make a decision.
Read More →
Driving into the Super CFC Era
Understanding the risks and benefits of retail accounting and Super CFCs can help you better present options to your dealer partners.
Read More →