Do a lot of your buyers have less than perfect credit? Has it been an absolute struggle to qualify them for competitive financing? Well, according to Experian Automotive, this credit squeeze on nonprime buyers with scores under 700 might just be easing up.
According to the recent Experian report, auto buyers with nonprime credit scores (or lower) made up a little more than a fifth of the new-vehicle financing pie during the second quarter of 2011. That’s up about 18% over the same period in 2010. Leading this boost were banks – who gave new loans to 21% more buyers with nonprime credit. Lenders associated with automakers specifically also expanding the same types of loans by nearly 8%.
This is exciting and encouraging news for the US auto market, which saw its worst year in 27 back in ’09. Last year, sales were up by 1.2 million from that low for a total of 11.6 cars sold. So, if the lending market showing signs of loosening is any indication, the sales figures for 2012 should show even more growth.
One of the reasons for the credit market opening back up to less than perfect buyers – loan payments are far less delinquent statistically than in years past. According to the same Experian report, loans with 30 days past due payments fell to an incredibly low 2.59% in the second quarter. Loans with 60 day past due notices also fell by a tenth of a percent.
Of course, your customers might not realize that the credit squeeze is easing. However, we can quickly perform a market assessment of nonprime buyers in your area to help you target them and let them know with an informative direct mailer.