Subprime Auto Loans in the US - Industry Market Research Report

Subprime Auto Loans in the US - Industry Market Research Report

  • August 2018 •
  • 33 pages •
  • Report ID: 5566669 •
  • Format: PDF
Past their prime: Rising interest rates will continue to stifle industry revenue growth

Abstract

Subprime Auto Loans
Over the five years to 2018, operators in the Subprime Auto Loans industry contended with rising interest rates and increasing delinquency rates, which took a toll on profit margins for many operators. Several small, specialized creditors have been pushed to bankruptcy due to diminishing profitability and a growing number of subprime auto loan delinquencies. Furthermore, during the five-year period, increasing interest rates increased borrowing costs for subprime consumers, slowing demand for industry financing to purchase vehicles and dampening profit margins for many lenders. Consequently, industry revenue is forecast to decline. Moving forward, growth will be restrained by rising interest rates, which will raise borrowing costs and slow vehicles sales. Additionally, interest rates are expected to increase to normalized levels over the five years to 2023. As interest rates rise, subprime consumers are expected to be less incentivized to finance purchases of large-item goods such as vehicles due to higher monthly interest payments.

Operators in this industry finance automobile purchases through loans and leases for subprime borrowers, defined as borrowers with a credit score below 620.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.
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