A Snapshot Of What Sub-Prime Buyers Are Driving

by Derek Kreindler

Published: April 24th, 2013

a snapshot of what sub prime buyers are driving

Sub-prime finance has attracted a bit of interest (no pun intended) over at TTAC lately, and the segment itself has experienced phenomenal growth in the post-bailout era.

Auto lending site www.carfinance.com released a list of the top 10 most popular new and used vehicles as purchased by sub-prime buyers over the last six months. While it’s not the most complete list by any means, it does give us a glimpse into the choices of sub-prime buyers. As far as we know, no such list has ever been compiled prior to this.

Top 10 New Cars for sub-prime buyers according to carfinance.com (from October to March 2013)

1. Dodge Avenger

2. Kia Forte

3. Kia Optima

4. Chrysler 200

5. Dodge Journey

6. Ford Focus

7. Ram 1500

8. Nissan Sentra

9. Nissan Versa

10. Kia Sorento

A few things jump out here. First off, this list has almost no crossover with the usual top 10 selling new vehicles in America. Only the Ram 1500 appears on both lists. Second, Chrysler products make four appearances on this list, with the Dodge Avenger and Chrysler 200 well know among the B&B for being very aggressively priced, to the point where it makes buying a Dodge Dart seem nonsensical. Chrysler has also been ramping up their own sub-prime lending program, through Santander and was the leader in sub-prime lending last year.

Also interesting are the relative dominance of Nissan and Kia. The latest Sentra and Versa have also been priced with a view to undercutting the competition, and the Versa has had success in the sub-compact market with its extremely cheap offerings (nonwithstanding the loss leader $9,995 Versa S, which is meant to get people in the showrooms and little else). Kia comes as a bit of a surprise, as very little is ever heard about them in connection with sub-prime purchasing. Any commenters with information or data that can help provide a better picture, please feel free to contribute.

#Chrysler200 #Dodge #DodgeAvenger #DodgeJourney #FordFocus #KiaForte #KiaOptima #KiaSorento #NissanSentra #NissanVersa #Sales #Ram1500 #Sub-prime

Derek Kreindler

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9 of 213 comments

Maymar on Apr 25, 2013

I can think of a not insignificant number of Kia dealers in my area that were previous Pontiac franchises. In so many ways, it was a natural transition, and I suspect the sub-prime buyers aren't too different.

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- 28-Cars-Later on Apr 25, 2013
  
  Kia = Pontiac? I'm not seeing it.
  
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- Sunridge place on Apr 25, 2013
  
  @28-Cars-Later Its very obvious to me. Do you think Pontiac customers are too good for Kia or Kia customers are too good for Pontiac? Remove the G8/Solstice (very low volume) from your brain and think Sunfire/Grand Am/Grand Prix/G6 vs Kia today.
  
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- 28-Cars-Later on Apr 25, 2013
  
  @sunridge place The Optima certainly looks pretty nice but for the most part when I think Kia I think cheap disposable subprime cars, no amount of faux SUVs, boxy Souls, or clever ads will change that perception. They are the Saturn of this time. Sure you could make the argument Kia is restyled Hyundai, as Pontiac was restyled Buick/Chevrolet, and I'll roll with it, but I don't see a direct correlation. Speaking as a Grand Prix owner for what it is, it blows Kia's equivalents out of the water and I'll still take the N-body Grand Am, J-body Sunfire, or even the maligned G6 over a Forte, Optima, and whatever else Kia still sells, but that's just my opinion.
  
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- Bd2 on Apr 25, 2013
  
  @28-Cars-Later And that would be just your opinion. The Optima (esp. in SX trim) is way superior to the Grand Prix or G6. And the Optima in SX-L trim fully loaded goes for around $34-35k. And we're not even talking about the Cadenza or the Quoris which are in whole different level from what Pontiac sold (since the 1980s at least).
  
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- Maymar on Apr 25, 2013
  
  @28-Cars-Later I'm mostly thinking on how Kia currently sells themselves on some combination of the illusion of sportiness, price, and looks. Granted, unlike Pontiac for years, Kia's products are legitimately good looking, not just distinctive flared nostril monstrosities. As for the first point, I drove an Optima SX recently, and it was admittedly quick, but it didn't feel like it wanted to be. And the Forte Koup is a pretty solid replacement for the Sunfire GT/Cavalier Z24. And, although their stuff is no N-body Grand Am inside, it still feels a little cheaper than a lot of the competition. That said, I could see Nissan filling in as the Asian Pontiac as well, although most of their stuff seems to have gotten softer in the past couple years. I might just be swayed by the number of Pontiac dealers that turned Kia when they lost their franchise, which allowed for a number of people to trade their Pontiacs for Kias just by virtue of repeat sales.
  
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- Danio3834 on Apr 25, 2013
  
  @Maymar Agree. Even when I worked for Nissan, I considered them the Japanese Pontiac.
  
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- 28-Cars-Later on Apr 25, 2013
  
  @28-Cars-Later Ah I concede, this is all opinion, but I would point out Grand Prix and G6 are two completely different models the former being superior in almost every way. If we compare the Grand Prix GT (second trim of three) to the SX (third trim of four) and SX-L (forth trim) 2013 Optima SX is 26,800 + dest Std features: 2.0 I4 GDI/6 spd auto, EPA 22/34 274 bhp @ 6000 rpm / 186 tq @ 4200 rpm Interior: Sport leather/cloth 8 way power seat lumbar Leather wrapped steering wheel/shifter Various dash inserts CD/MP3 with 6 speakers Trip computer Push button start Bluetooth Steering wheel audio controls Keyless entry Exterior: 18in alloy wheels Sport tuned suspension Chrome accents HID headlights Fog lights Heated mirrors Chrome tipped dual exhaust I bought mine as-is in 2010, the specs for a GT were as follows: 2007 Grand Prix GT was $24,735 + dest 3.8L V6 Supercharged/4 spd auto, EPA 17/26 (fuel economy.gov) 260 hp @ 5400 rpm / 280 tq @ 3600 rpm (Series III 3800) Interior: Leather Heated Seats Moonroof 6 way power drivers seat w/lumbar Auto climate control plus passenger side controls Trip computer Leather wrapped steering wheel/shifter CD/MP3 with 6 speakers Steering wheel audio controls Keyless entry Exterior: 17 in alloys So called "sport suspension" (I see no difference between this and a base) Dual exhaust Spoiler Fog Lights Remote start Between the Optima SX and the GP GT, I would say they are about the same type of car with options, pricing today would similar due to inflation. The GP offers almost all of the same std features save the HID headlights and heated mirrors while giving you a moonroof, heated seats, spoiler, and remote start in the same package (I cannot find remote start being offered on the Optima, it might be but not std). The GP GT also gives you gobs of usable torque (280 ft-lb vs 186 ft-lb) and similar horsepower (260 vs 274). I take issue with the EPA mileage as I get 19/32 (26.7 mixed avg) at any given time, although I don't stomp on it much. So between the two, they are very similar offerings except one offers almost 100 more ft-lbs and several nice features in the same mid-tier package. To GM haters, the Kia would be the more natural choice and they'll just pay extra for the heated seats, moonroof, spoiler etc (which are all optional on SX), but objectively its difficult to automatically refute the Grand Prix. The SXL offers all of those features standard and more (with the same engine) but runs $34,500. The equivalent Pontiac trim (if there is such a comparison) I suppose would have been GXP which msrp'd at 28,800 with a V8 and a few other features (navi, heads up display etc). In this context the Kia SXL may have won out on additional features for similar money, assuming buyers don't care about the I4 to V8 comparison. I have to say Kia is offering you more than I realized so I'll give them props. But unless there's some kind of nice incentive, $26,800 + $800 dest + $1932 tax (pgh 7%) for a total of $29,532 seems like alot (for SX), although this might be a "the industry just sucks" thing vs a Hyundai/Kia thing.
  
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95_SC on Apr 25, 2013

Given how every Kia dealer is yelling and screaming in the commercial I suppose this fits. Also, does Dodge have like a 10 year Mortgage on the Ram or something. I could see some of the folks I know driving these at like 14 percent for 120 months.

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