The Subprime Lure
In another effort to drive in more business, some auto lenders, including credit unions, may be more willing to be flexible with credit-challenged consumers.
Experian Automotive recently said 21.87% of all new vehicle loans went to customers in the nonprime, subprime and deep subprime categories, according to its most recent quarterly data.
“Consumers continue to do a better job of repaying loans, while at the same time, many of the most risky loans from 2007 and 2008 are now off the books,” Zabritski said. “These factors combine to lower the total volume of dollars at risk and give lenders more confidence in loosening their overall lending standards.”
During the third quarter, 30-day delinquencies fell 7.05% while 60-day delinquencies fell 7.4%, according to Experian. Repossession rates dropped by 6.4%, from 0.67% in third-quarter 2010 to 0.62% in third-quarter 2011.