Subprime auto loans seem to be an all too easy target these days. An increased negative media focus on some worst-case scenario situations has drawn criticism to an industry that — rather than a pointed finger — deserves some recognition for weathering the storm of the Great Recession, and ultimately helping to pave the way for our recent economic recovery.
A close examination of actual loan data from Equifax of more than 210 million consumers is very revealing. The numbers show that subprime auto lending has been delivering a viable second chance for many consumers who fell on hard times during the recession, and have since been struggling to rebuild their financial and credit risk standing. The data also shows that subprime is a well managed and stable subset of automotive lending—a subset that has been a key driver of our overall economic health.
