Some lenders complained in first-quarter earnings reports about smaller and later tax refunds.
IRS refund statistics weren’t down by much, but any change is important because tax refunds contribute to the annual peak in subprime financing, according to dealers and subprime lenders.
Charles Bradley, CEO of Consumer Portfolio Services, for example, noted in a conference call last month that tax refunds were on a “slow roll” in the first quarter. As of March 29, the Internal Revenue Service said it had processed about 85 million returns, down about 5 percent from a year earlier. The size of the average refund was down 1.3 percent, to $2,790, the IRS said.
The IRS has caught up since then. Processed returns were at about 128 million as of May 3, down less than 1 percent from a year earlier. The size of the average refund was down about 2 percent, to $2,656.
The timing probably pushed some subprime sales into the second quarter. But it’s not like the bottom dropped out of this year’s tax refunds.