As vehicle sales fell sharply in the second quarter amid coronavirus pandemic conditions, the amount of subprime consumers originating auto loans slipped to its lowest recorded level, credit bureau Experian said this month.
Melinda Zabritski, senior director at Experian Automotive, said subprime market shares have contracted for years after peaking in 2013. COVID-19 conditions likely expedited the pullback, particularly in the new-vehicle market.
"Second quarter being what it was ... the impact of quite a few people with lower credit scores being impacted a little bit more with unemployment rates, and just simply not being able to even shop in the current conditions," Zabritski said.
New light-vehicle sales across the U.S. declined 33 percent during the second quarter, according to the Automotive News Data Center.
Subprime customers made up 22.2 percent of auto loans, new and used, originated in the second quarter for the first time since Experian began tracking the data in 2007. Deep subprime borrowers, with credit scores of 500 and below, dropped below 3 percent — another all-time low. The average credit score for a new-vehicle loan rose 4 points year over year to 721.