Subprime shrinks in Q3 auto loans

The share of subprime and deep subprime new-vehicle loan originations in the third quarter hit its lowest level since 2012, while prime and super prime loans continued to make up nearly three-quarters of the market, according to Experian's latest State of the Automotive Finance Market report, released Thursday.Subprime and deep subprime new-vehicle loan originations made up only 10.74 percent of the market, according to Experian, down 4.3 percent from a year earlier."The market turning more prime is an encouraging trend. It indicates that industry professionals are using data and analytics as part of the lending process, and consumers are taking a more active role in managing their credit before buying a car," Melinda Zabritski, senior director of automotive finance for Experian, said in a statement.The decrease in subprime originations is a result of lenders tightening their criteria and consumers improving their credit, she said."More consumers who are prime or super prime are the consumers who are obtaining the financing. The subprime consumers are still out there shopping, and they're still out there obtaining their loans," Zabritski told Automotive News. "But we are seeing more loans coming into the market that are in better credit quality. Some of that could be a result of lenders tightening up a little bit." Terms, payments rise

Subprime shrinks in Q3 auto loans

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