The latest Industry Insights Report from the credit bureau TransUnion revealed some troubling trends. If you are a car buyer with less than perfect credit, it appears you are going to want to act sooner rather than later if you need an auto loan.
TransUnion's Latest Findings
TransUnion releases their Industry Insights Report every quarter. The latest report, covering the first quarter of 2017, revealed evidence that lenders are making fewer loans, especially when it comes to the subprime sector.
For those who are unaware, "subprime" is a classification for credit scores that are considered to be below average.
The TransUnion report showed that, overall, auto loan originations were down 0.2%. However, subprime loan originations dropped 5%, which is huge when talking about numbers of this scale.
Additionally, TransUnion reported that delinquency rates are on the rise. Auto finance delinquency rates increased to 1.30% in the first quarter of 2017, compared to 1.16% a year earlier. The bureau attributed this to poor payment performance by the subprime and near prime segments.
So, the two main takeaways from the report are: (1) fewer auto loans are being approved, especially in the subprime segment, and (2) delinquencies have ticked up. This combination could mean more changes are coming.
"Regardless, with flatter sales volumes and higher delinquencies, we anticipate lenders will evaluate their credit policies for subprime and near prime borrowers to calibrate for the uptick in delinquencies," said Brian Landau, TransUnion's senior vice president for financial services.
Time to Act
What does this all mean? If you are a consumer with less than perfect credit and you are considering financing a car, it appears you should to act quickly.
Several trends in the auto industry, including those covered in TransUnion's report, lead us to believe that it may be much tougher to get approved for a subprime car loan in the near future.
First, car sales are slowing down after several very strong years. Then, we see from the report that delinquencies have risen from a year earlier. Finally, loan originations have already dropped significantly in the subprime sector. If these trends continue, the effects will only intensify from here on out.
Connecting the dots, it's clear that it's in your best interest to move quickly if you have bad credit and need a car loan. But, oftentimes, it can be tough locating a dealership that is able to work with you when you have imperfect credit.
Auto Credit Express is here to make that process easier for you. We help consumers find car loans by connecting them to local special finance dealerships. These places have the lenders and know-how to assist buyers in unique credit situations.
Plus, our service is free and it doesn't put you under any obligation to buy anything. Get started by completing our secure car loan request form right now.