The report also found captives and banks grew loan originations at similar rates year to date for the first four months, increasing around 10% each.
As expected, captives dominated leasing. “The captive auto finance companies are supporting sales for the manufacturers,” Equifax’s Deputy Chief Economist Dennis Carlson said in a press release on Monday.
“And dealers continue to work with independent auto finance companies to find the right loans for their customers, particularly in the nonprime space.”
Through April, 23.5% of total auto loan originations were subprime, defined by Equifax as credit scores below 620, up from 22.7% a year ago. Carlson told Auto Finance News subprime growth is moderate considering media coverage earlier this year which suggested subprime was overheating.
“In terms of subprime lending, there is no spike, suggesting things continue to be very well-handled by the industry,” he said. Low delinquency rates, an improving labor market, and the availability of fast credit history checks for lenders all contribute to the subprime increase.