Buried in a feel good story about auto loans comes the news that subprime auto loans are at levels that we haven’t seen in nearly a decade.
Citing data from Equifax, Automotive News reports
The credit bureau also noted originations and total outstanding balances for subprime auto loans — defined as loans to customers with credit scores of 640 or below — also hit recent highs.
Equifax said subprime originations were 2.6 million units year to date through April, representing 32 percent of all auto loan originations. The total outstanding balance of subprime auto loans was $46.2 billion — the highest in eight years, the credit bureau said.
Don’t expect that 32 percent figure to let up any time soon. The glut of credit available for auto financing - driven by securitized auto loans sold as investment grade instruments – is going to keep the auto financing business alive and kicking for the foreseeable future.
But don’t worry, guys. This time, it’s different.