SCHAUMBURG, Ill. -

Evidently, dealerships and finance companies aren’t just giving cars away to just any consumer who arrives on the lot and completes a vehicle installment contract application, inflating that “bubble” some observers continue to mention.

On Monday, Experian Automotive reported that the percentage of automotive loans that fell within the subprime and deep subprime risk categories made up 19.7 percent of the market in the first quarter, representing its lowest share since 2012.

According to the State of the Automotive Finance Market report for Q1 2015, subprime loans made up 16.2 percent of the market, while deep subprime loans captured 3.5 percent.

Experian defines subprime as individuals with VantageScore 3.0 credit scores between 501 and 600 and deep subprime consumers as coming in between 300 and 500.

 “Over the last year, there has been a tremendous amount of conversation around the growth in subprime loans, and the concern over the automotive finance industry approaching a potential ‘bubble,’” said Melinda Zabritski, senior director of automotive finance for Experian.

“While it’s true that the volume of subprime loans is up, the same can be said for the rest of the risk categories. It’s important to keep in mind that, while we should continue to watch them, the percentage of subprime loans make up a small portion of the market,” Zabritski continued.

Findings from the report also showed that finance companies continued to grow their overall portfolios, as total outstanding balances for automotive loans reached a record-high $905 billion in the first quarter 2015, up 11.3 percent from a year ago.

Additionally, despite an increase in the numbers of loans put into play, analysts found that both 30- and 60-day delinquencies saw slight decreases in the first-quarter report. Experian said 30-day delinquencies were down 4.1 percent from a year ago, while 60-day delinquencies dropped 3.2 percent over the same time period.

“The current stability in the automotive loan market is a testament to consumers making timely payments on outstanding loans, which is evident in the improvement in delinquency rates,” Zabritski said.

“While the market is in a positive position right now, dealers and lenders will want to want to keep an eye on these data sets and use them for the good of their business, as the insights enable them to make better decisions in terms of loan terms and interest rates,” she went on to say.

At a state level, Experian noticed the highest delinquency rates occured primarily in the South, while the states with the lowest rates were typically found in the Midwest and Northwest.

30-day delinquencies

60-day delinquencies

Highest delinquencies

Lowest delinquencies

Highest delinquencies

Lowest delinquencies

Mississippi

3.1%

North Dakota

0.9%

Washington, D.C.

1.0%

South Dakota

0.2%

Washington, D.C.

2.9%

Oregon

1.0 %

Mississippi

0.9%

Oregon

0.2%

Louisiana

2.7%

South Dakota

1.0%

Louisiana

0.8%

Minnesota

0.3%

South Carolina

2.6%

Washington

1.1%

New Mexico

0.7%

Arkansas

0.3%

Alabama

2.6%

Minnesota

1.1%

Alabama

0.7%

Iowa

0.3%