Subprime Borrowers Beginning To Fuel Auto Recovery?

Consumers with less than stellar credit are getting car loans again as lenders loosen their standards, and the trend is likely to continue as more lenders get into the business.

The percentage of loans going to subprime buyers rose 8 percent in the third quarter, their first year-over-year increase since 2007, according to a report issued Tuesday by Experian, a credit reporting agency. For new cars, the percentage of loans going to subprime buyers rose 13 percent over the July-September period in 2009. The increase for used cars was 3 percent.

The majority of loans — 63 percent — still going to buyers with prime credit scores, which is defined as a 680 or above. But even that is settling into a more normal pattern. Before the recession, when credit was very loose, just 51 percent of loans were going to prime buyers, according to Melinda Zabritski, director of automotive credit at Experian. Last fall, when credit was tight, 66 percent of loans went to prime buyers.


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thstone - 12/7/2010 2:53:29 PM

+2 Boost

Subprime loans + high gas prices = loan default.

Haven't we seen this movie before?

truckman - 12/9/2010 4:41:09 AM

+1 Boost

Corporate America feeding on the lower and middle class again, Obamma can't help you America, you need someone that doesn't take orders from the money people, someone like DR. Ron Paul, Its so obvious, And I like Obamma for the record, he doesn't want to wind up like Kennedy.