Subprime origination volume is down 4% from December 2015, when it peaked at 26% of overall auto originations, said Andy Mayers, vice president of lender solutions and product strategy at Cox Automotive.
“That’s something that’s a little bit alarming to me, because I think it is showing policies that lending partners have, in terms of tightening their buying,” Mayers told attendees at Used Car Week’s Subprime Forum last week. While this may be a sign of a slowdown in the market, Mayers was quick to note that it’s different from a bubble.
“There’s no bubble, and if anything, this industry is more prepared to protect itself against a bubble than it has ever been before,” Mayers said. “There are trends that could be looked at as alarming, such as booking ratios going down in subprime, but, to me, those are breaks in the process which prevent a bubble from bursting — because what they are doing is setting up the market and economy more strategically for when we have a downturn.”
