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Fed: Subprime Auto Loan Delinquencies Rising

November 28, 2017 0 Comments

According to a recent report from the Federal Reserve, trends are taking shape in regards to auto loans, taken out by subprime borrowers.

As reported on by Local10news, the Federal Reserve has released its most recent report on household debt, including auto loans. In terms of auto loan debt, the report indicated, “Nearly one in 10 car loans made to borrowers with bad credit was delinquent by 90 days or more in October.” Another standout stat from the report is a 9.7 percent delinquency rate for auto loans originated from a finance organization, verses 4 percent for combined banks and/or credit unions. The report also put the total number of subprime auto loan borrowers at 23 million, owing a combined (at least) $300 billion on their vehicles.

Speaking on the subject of subprime auto loans, Wilbert Van Der Klaauw, senior vice president at the New York Fed said in a report in part, “Examining the auto loan market more closely revealed notable differences between auto finance and auto bank lenders. Delinquency rates among auto finance lenders are considerably higher and rising, especially for subprime borrowers.”

What’s your take on these auto loan numbers and…what trends do you see at your store or group in regards to the auto loans utilized by your customers?

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