Lenders cutting back on subprime and deep subprime auto loans

According to data from Experian Automotive, in the second quarter of 2014 auto lenders are stopping the practice of lending to customers with subprime and deep subprime credit scores. Subprime and deep subprime credit scores that are below 620. In the first quarter these subprime and deep subprime borrowers accounted for 15.1% of new vehicle loans which is down significantly from 22.1% the previous year. Loans for used vehicles are down 50.6% from the second quarter of 2013. Used vehicle subprime and deep subprime loans accounted for 40.2% in that same time period.

In a statement from the senior director of automotive finance for Experian Melinda Zabitski, lenders are cutting back on risk. She went on to say “Although we’ve seen relative stability in the automotive industry the past several years lenders are still showing cautionary signs when lending to the subprime market and keeping their risk at manageable levels.”