Percentage of subprime automotive loans falls to lowest level in three years
Report also shows total outstanding loan balances reach record high of $905 billion
SCHAUMBURG, Ill., May 18, 2015 /PRNewswire/ -- Experian Automotive today announced that the percentage of automotive loans that fell within the subprime and deep subprime risk categories made up 19.7 percent of the market, reaching its lowest share since 2012. According to the State of the Automotive Finance Market report for Q1 2015, subprime loans made up 16.2 percent of the market, while deep subprime loans captured 3.5 percent.
"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 percent 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 percent from a year ago, while 60-day delinquencies dropped 3.2 percent 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.
| 30-day delinquencies |
60-day delinquencies |
||||||
| Highest delinquencies |
Lowest delinquencies |
Highest delinquencies |
Lowest delinquencies |
||||
| Mississippi |
3.1% |
North Dakota |
0.9% |
Washington, D.C. |
1.0% |
South Dakota |
0.2% |
| Washington, D.C. |
2.9% |
Oregon |
1.0 % |
Mississippi |
0.9% |
Oregon |
0.2% |
| Louisiana |
2.7% |
South Dakota |
1.0% |
Louisiana |
0.8% |
Minnesota |
0.3% |
| South Carolina |
2.6% |
Washington |
1.1% |
New Mexico |
0.7% |
Arkansas |
0.3% |
| Alabama |
2.6% |
Minnesota |
1.1% |
Alabama |
0.7% |
Iowa |
0.3% |
About Experian Automotive
Experian Automotive provides information services and market intelligence that enables results-driven professionals to gain the fullest possible understanding of the market, the vehicles and the people who buy them. Its North American Vehicle DatabaseSM houses data on nearly 700 million vehicles and, when combined with Experian's credit, consumer and business information, provides an integrated perspective into the automotive marketplace. Experian Automotive's AutoCheck® vehicle history reports provide dealers and consumers with in-depth information, allowing them to confidently understand, compare and select the right vehicles. For more information on Experian Automotive and its suite of services, visit our Website at http://www.experian.com/automotive.
About Experian
We are the leading global information services company, providing data and analytical tools to our clients around the world. We help businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. We also help people to check their credit report and credit score, and protect against identity theft. In 2014, we were named by Forbes magazine as one of the "World's Most Innovative Companies."
We employ approximately 17,000 people in 39 countries and our corporate headquarters are in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and Sao Paulo, Brazil.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2015, was US$4.8 billion.
To find out more about our company, please visit http://www.experianplc.com or watch our documentary, "Inside Experian."
Experian and the Experian marks used herein are trademarks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners.
Contact:
Roslyn Whitehurst
Experian Public Relations
1 714 830 5578
[email protected]
Twitter: @RozWhitehurst
SOURCE Experian Automotive
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