Increase in lending to car buyers with subprime credit
Perhaps another sign that the 'Great Recession' is thawing. Lending to people with a so-so credit score is on the uptick - at least in the car market.
The Associated Press reports "the percentage of loans going to subprime buyers rose 8% in the third quarter, their first year-over-year increase since 2007, according to a report issued Tuesday by Experian, a credit reporting agency."
Banks and auto financing companies are feeling comfortable lending money to these kinds of consumers again because savings rates are up and because the consumers themselves are more cautious. From the article:
- The percentage of loans that were delinquent for 30 days fell 8% in the third quarter, to 3%.
- The percentage of loans delinquent for 60 days fell 17%, to less than 1%.
If you're wondering what people borrow these days for a car - the average for a new car is $25,273. The average for a used car is $16,706.