According to the latest Experian reports, subprime and deep subprime loans are holding at a record low percentage of used car loans.
Not only does the State of the Automotive Finance Market report for the third quarter of 2021 show that subprime loans are at record lows, but it also reveals that prime and super-prime borrowers now make up over half the used car loans – 55.91% of the market share.
This is partly due to the inventory issues facing the automotive market today. You may have seen some buyers who would normally shop for a new car turning to used and CPO vehicles due to a lack of new cars in stock.
Though many shoppers have turned to custom-ordering cars, others opted to take advantage of what's available now. However, even though used car loans are still going heavily toward prime+ borrowers, the report also shows the trend is that these customers are exiting the used car market.
Only 46.84% of super-prime borrowers chose used cars in Q3 2021 compared to 47.72% and 47.28% in 2020 and 2019, respectively. Only 62.78% of prime borrowers chose used vehicles compared to 64.39% in 2020.
When it comes to choosing used cars, deep subprime, subprime, and near-prime borrowers often do. In fact, the percentage of these prospects choosing used vehicles has been steadily climbing as the price of vehicles has increased. This quarter the percentage of them choosing used is 95.45%, 87.18%, and 74.88% respectively.
What Does This Mean For You?
With more and more subprime borrowers choosing used cars, now is the time to bring in the prospects you need. And, you don't have to go it alone. At Auto Credit Express, our expert team can help you bring in prospects from many sources you may not be exploring, including subprime. Become part of our network of dealerships and see how we can work to get you proprietary leads from shoppers who are ready to buy. To see how we can help your dealership grow, contact us at 888-535-2277, or fill out our contact form online and our staff will reach out to you.