Numerous credit market spectators are looking at the increase in nonbank lenders giving out loans to less-than-ideal credit borrowers. However, Experian said the lending market has already tightened – lenders are getting selective, and there’s been a drop in auto-loan delinquencies.
According to Experian, the average credit score for a new auto loan increased to 717 for the first quarter in 2017. In 2016, that number was 712. With used car loans, that number rose to 652 from 645.
Experian said there’s going to always somebody claiming that the subprime bubble for auto loans is going to burst. The reality is that lenders are making better decisions because of the market shifts. When there’s a rise in delinquencies, the industry tends to focus on the credit-worthy customers first.
Many would-be vehicle shoppers have hesitated in buying new vehicles because of the higher prices, with the number of sales for the month of June down. On top of that, Detroit didn’t dump the unwanted inventory into the car rental industry, which kept the prices up.