Subprime Auto Loans Are On the Rise

The word “subprime” might sound scary to some in the wake of the recent financial crisis. Those familiar with the finance industry know that subprime ratings apply to those falling short of excellent, squeaky-clean credit ratings. Just because they haven’t built the same level of credit history as “prime” consumers doesn’t necessarily mean they can’t afford to keep up with loan payments on a car. Subprime auto loans fared reasonably well in the recession, and there are plenty of reasons to provide them at your dealership.


Subprime loans can provide an extraordinary opportunity for families and individuals looking to get off on a good foot. Most people need a car to get to and from work, making it a valuable investment that leads to further financial stability and growth. In fact, the success of subprime auto loans is due in part to borrowers prioritizing their car payments over other expenses.


One major reason why subprime auto lending is on the rise is that delinquencies have fallen below pre-recession levels. Lenders are beginning to battle for a piece of the increasingly competitive subprime market, which is great news for the auto industry. Subprime auto loans currently account for around 35% of total loans, a substantial chunk of the market to potentially miss. All the while, big banks are recognizing the opportunity and positioning themselves to take a bite out of dealer profits.


At Reliable Auto Finance, we possess a high level of knowledge and expertise in the subprime auto loan field. We can help to identify borrowers on metrics that go beyond a simple credit score. We help consumers rebuild their credit, and help dealers secure a place at the receiving end of rewarding, profitable auto loans.