Since 2010, credit bureaus and auto lenders have tallied quarter after quarter of near-record lows for delinquencies, even though volume and subprime loans are up.
So couldn't lenders open up the spigot just a little more?
Granted, there has been a slight uptick in delinquencies here and there, but most indications are auto lenders are sticking to a conservative strategy.
Lenders have been worrying about what they call irrational competition, especially in subprime, for a few years now. Irrational competition results when lenders approve marginally profitable or even unprofitable loans just to gain market share.
Dealers recognize that sort of competition is bad for the industry in the long run, even though it gooses sales in the short run. So lenders don't have to go crazy.
But couldn't they afford to be a little less buttoned down and finance more car customers?