With Cox Automotive experts suspecting that “credit will likely tighten as the appetite for subprime declines,” the company also shared the makes that have the largest penetration of subprime retail installment contracts and vehicle leases so far this year.
Cox Automotive chief economist Jonathan Smoke reviewed the much-publicized data recently released from the Federal Reserve Bank of New York that generated so much attention because it showed more than 7 million contract holders were in delinquency. Smoke shared his assessment first in this Weekly Summary and then expanded in exclusive analysis shared with SubPrime Auto Finance News beneath a title line that read, “Credit will likely tighten as the appetite for subprime declines.”
Smoke continued, “Year-over-year, the number of severe delinquent accounts is up 4.4 percent. Subprime auto loan delinquencies increased much more, as the number of subprime severe delinquent accounts is up 5.9 percent.
“The subprime severe delinquency rate on auto loan accounts was 5.14 percent, which was the highest rate for any December since the Great Recession,” he noted.
“The auto delinquency problem is mainly in subprime as subprime severe delinquencies represent 69 percent of severe delinquencies, yet subprime accounts only represent 20 percent of active auto loan accounts,” Smoke went on to say.
So which brands might be most connected to those subprime contracts that could be in peril? According to data fueled by Dealertrack, here are the badges with the leading amounts of subprime market penetration: