Sep 07, 2011 Matt Roesly
According to an emailed report by Experian Automotive, auto lending has loosened for those with weak credit, Bloomberg reports.The percentage of buyers with nonprime or worse credit has increased from 18 percent to 22 percent in the second quarter, year-over-year. Furthermore, 21 percent of banks loaned to those with subprime credit scores during that time. This is a marked change in the lending landscape, as stricter loan requirements led to 10.4 million auto deliveries in 2009 - the lowest annual total since 1982. Through the first half of 2011, that number has jumped to 12.5 million. The largest increase in auto financing was for those under the highest risk category - deep subprime. Loans to these individuals spiked by 44.1 percent in Q2 2011 - from 1.48 to 2.13 year-over-year. "Even with a tepid economic recovery in the first half of the year, automotive lenders were willing to increase their level of risk," said Melinda Zabritski, director of automotive credit for Experian Automotive. "This was good news for automotive manufacturers, as nearly half of all consumers fall into non-prime, subprime and deep subprime risk categories."