Even as subprime lending has picked up, resulting in more vehicle sales to credit-challenged customers, delinquencies and repossessions have fallen to record lows, data from Experian Automotive show.
Melinda Zabritski, senior director of automotive credit for Experian Automotive, says a number of reasons could explain the apparent discrepancy. But the most simple is fairly basic: "Rates are down," she said.
Low interest rates keep loans more affordable, thereby helping consumers avoid delinquencies and defaults.
And as long as delinquencies and repossessions remain low, lenders will be encouraged to and can afford to offer easier access to credit — a big positive for dealerships.