The share of nonprime, subprime, and deep-subprime loans as a percentage of total outstandings hit a record low in the fourth quarter, according to Experian’s latest report.
New vehicle loans and leases to nonprime consumers fell to 19.64% of total outstandings, compared with 19.77% during the same period the year prior. Similarly for used loans, nonprime loans made up 20.39% of the market, down from 20.43% in the fourth quarter 2016.
The decline comes at a time when several banks previously told AFN that they were focusing more on this nonprime space. For example, Ally Financial Inc. and BMO Harris are among the banks refocusing attention on the nonprime space.
Meanwhile, subprime marketshare is diminishing as banks such as Wells Fargo Auto pull back from the space. Subprime penetration of the used space fell to a record low of 18.82%, compared with 19.56% the same quarter the year prior.
Deep-subprime loans had also been on the rise in previous quarters, but in the fourth quarter declined by 39 basis points year over year.
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