Leasing and Subprime Loans Looking Good, Says Experian Automotive

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Exper­ian Auto­mo­tive has looked at two auto finance seg­ments for sec­ond quar­ter per­for­mance – new-vehi­cle leas­ing and sub­prime risk tiers, and is see­ing sol­id results in these impor­tant seg­ments. Ana­lysts say leas­ing rep­re­sent­ed 24% of all new-vehi­cle financ­ing dur­ing the sec­ond quar­ter. This puts it on par with the sec­ond quar­ter of 2008. Leas­ing had been reduced quite a lot by 2009, mak­ing up 17.68% of new vehi­cle fund­ing by the sec­ond quar­ter of that year.

“While yes, leas­ing units were dra­mat­i­cal­ly impact­ed after the reces­sion, it bounced back as a per­cent­age of financ­ing fair­ly quick­ly,” she con­tin­ued. “It’s also been very sta­ble and while the mar­ket has been recov­er­ing unit-wise, leas­ing is on the same recov­ery stand­point at it relates to vol­ume,” said Melin­da Zabrit­s­ki, direc­tor of auto­mo­tive cred­it for Exper­ian Auto­mo­tive.

With 25.41% of all new vehi­cle loans to cus­tomers in the non­prime, sub­prime and deep sub­prime risk tiers, loans to cred­it-chal­lenged cus­tomers were up 14% com­pared to the sec­ond quar­ter 2011, accord­ing the Experian’s research. How­ev­er, lenders are still being cau­tious, keep­ing loan-to-val­ue ratios low­er than they were a year ago.

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