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Subprime Auto Credit: Navigating Risks on the Horizon

MICHAEL VOGAN, AUGUST 2017

Auto lending is following a natural and expected credit cycle. Subprime performance will get better as credit tightens. Nonbank auto financiers are facing the highest loss rates when lending to low-income, subprime borrowers. Residual value pressures should begin to abate but will likely increase for trucks and SUVs. Watch the Webinar Replay.

Chart Book

Auto Lease Total: Default Balance (Mil. $, NSA) Source: Equifax, Moody's Analytics

Auto Lease Total: Originations Number (ths, NSA) Source: Equifax, Moody's Analytics
Auto Loan Total: Default Balance (Mil. $, NSA) Source: Equifax, Moody's Analytics

Auto Loan Total: Originations Number (ths, NSA) Source: Equifax, Moody's Analytics
Manheim Used Vehicle Value Index (Jan1995=100, SA) Source: Mainheim, Moody's Analytics

New Vehicle Sales (Mil. #, SAAR) Source: U.S. Bureau of Economic Analysis, Moody's Analytics

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