We often report on the delinquency rates of vehicle installment contracts held by consumers. Later this week, TransUnion plans to share its second-quarter data with SubPrime Auto Finance News.

But what about the repayment activity by dealerships associated with the commercial financing business? While there doesn’t appear to be industry-wide data available like what’s generated by TransUnion as well as Experian and Equifax on the consumer side, the Q2 updates from General Motors Financial as well as KAR Auction Services give at least a little sense of what might be happening in that part of the credit world.

First, let me start with GM Financial, which stated in its Q2 report that its total global receivables in the commercial space stood at $9.7 billion. Chief executive officer and president Dan Berce told investment analysts “commercial lending has experienced steady growth in the U.S." A year earlier, the overall figure stood at $6 billion.

Berce noted that GM Financial had 827 dealers in the U.S., leveraging its commercial services as of the close of the second quarter, a 25-percent lift above the same point a year earlier.

As far as those dealers maintaining their commitments, GM Financial reported that its allowance for losses as a percentage of commercial finance receivables, net of fees, remained at 0.5 percent on June 30; the same figure as the close of 2016.

Meanwhile over at KAR, activity at Automotive Finance Corp. offered a slightly different perspective on the commercial-space story.

The company reported AFC’s Q2 revenue declined by 4 percent in part because management increased the provision for credit losses to 2.6 percent, up from 1.3 percent a year earlier. That uptick translated to $6 million, according to KAR Auction Services chairman and chief executive officer Jim Hallett.

“As I look at AFC, we continue to operate our finance company very conservatively. The number of loan transactions was relatively flat,” Hallett told attendees on the company’s quarterly conference call. “The provision for credit losses was 2.6 percent of average loan balances for the quarter. We’ve told you that we expect lower loan losses in the second half of the year.

“While the second-quarter loan losses were up as expected, I have good news to discuss within the quarter,” he continued. “The loss provision was high in April and May as we ran off the defaulted loans that we had discussed on previous calls. Our June provision for credit losses was below our expected loss rates of 1.75 percent to 2.25 percent of our average receivables, as the credit quality of our portfolio has continued to improve.

“This is a very good indicator for what we expect to see in the second half of 2017,” Hallett went on to say.

While Hallett made those assessments during the opening portion of KAR’s call, Wall Street watchers continued to probe about the health of AFC’s portfolio and dealerships’ ability to maintain their floor plan payments. AFC’s total managed receivables softened slightly year-over-year to $1.736 billion.

“Listen, what happened for these higher loan losses were a very small number of dealers with larger credits that probably misjudged what was happening to used-car prices at the higher end of the market,” KAR Auction Services executive vice president and chief financial officer Eric Loughmiller responded.

“I think they just caught with inventory that had some depreciation in terms of prices falling, and maybe they got caught with inventory that was overpriced at the wholesale market,” Hallett interjected. “But I think the other thing that’s important to point out here is that the independent dealer is still doing quite well.

“The independent dealer year-over-year is showing an increase in the total number of used-car sales. So, it's still a very healthy market and a very healthy group of dealers. And I’ll just repeat what Eric said, I think this was just a very small group of dealers that really got over their skies on some of their buying and got caught with that heavy inventory,” Hallett went on to say.

So perhaps just like some car buyers who take on too much debt and end up in delinquency, a few dealers ended up in a similar kind of financial pickle when acquiring inventory, at least if some of the AFC figures and anecdotes from Hallett and Loughmiller are any indication.

As we all watch the movements of wholesale prices and retail sales for the remainder of the year, it might be worth keeping an eye on commercial financing activity, too. Not intending to pull any fire alarms here, but if both dealers and vehicle contract holders begin to fall behind en masse, it’s going to be finance companies left to look for collateral in the driveway — and maybe the showroom, too.

Nick Zulovich is senior editor of SubPrime Auto Finance News and can be reached at nzulovich@cherokeemediagroup.com.