Along with some explanation about conflicting economic trends, CNW Research highlighted the healthy year-over-year gain in subprime financing the industry has posted this month.

According to the firm’s latest Retail Automotive Summary, CNW indicated the amount of completed contracts connected to subprime borrowers is 18.6 percent higher in October compared to the same month a year ago. On a sequential basis, the gain is much more marginal at just 0.35 percent.

CNW broke down the subprime data and found that minority borrowers constitute the majority of that figure with Hispanics comprising 39 percent, African-Americans making up 32 percent and Asians representing 7 percent.

Varying Trends

CNW president Art Spinella explained there are two economic measurements he thinks might be conflicting: consumer confidence and auto sales.

“While most analysts and reporters want to link the two by claiming higher confidence results in greater new-car sales, the reality is the national confidence (and vice-versa) measurements are questionable as a means of determining sales of big-ticket items,” Spinella said. “Why? They measure everyone equally even if the person surveyed is neither likely nor financially capable in making a $30,000 acquisition.”

In reality, Spinella contends that concerns about the economy may impact everyone surveyed because of rising food prices or job stability and what he called the “actual key” market

“Those capable, willing and able to make a vehicle purchase is likely to have a totally different view of their economic well-being,” he said. “A new or larger monthly payment isn’t as much of a concern.”

Update on Jitters Index

Among key market consumers, CNW’s Jitters Index — which measures consumer concerns that may impact auto buying — again improved in October.

This month’s reading topped September’s measurement by 2 percent and last October’s mark by a healthy 8.6 percent.

Spinella indicated that movement turned into a “whopping” 19 percent increase in floor traffic with an “impressive” 11.4 percent gain in closing ratios.

He added same-store sales were up a modest 4.4 percent “indicating many dealerships completed renovations, remodels and location moves in time for the fall season.”

Additionally, in what should be good news for finance companies, CNW noted the share of vehicles sold at retail topped 60 percent, returning to a historic trend line, according to the firm.