Subprime Loans Back on the Table for Auto Lenders
The report which shows that these are the facts, published by information services company Experian, shows that in the first three months of the year, the share of loans granted to buyers that do not usually qualify for a loan grew by 11.1 percent compared to the same period of 2010. At the same time, the share of loans granted to nonprime buyers increased by less than that, or just 9.81 percent.
The study conducted by Experian also showed that the average loan amount for a used vehicle jumped $397, from $16,239 in Q1 2010 to $16,636 in Q1 2011, while the average loan term has increased by a full month, jumping to 63 months for new vehicles and 58 months for used.
"As the automotive credit market continues to stabilize, lenders are showing a higher tolerance for risk," said Melinda Zabritski, Experian's director of automotive credit.
"Thirty-day delinquencies are at their lowest point since Q4 2008, giving lenders a little more leeway in their loan decisions. Additionally, with lower average scores for new vehicle loans and more loan activity for credit-challenged customers, it is easier to find a loan now than at any time in the past 30 months."