GWC Warranty is quite bullish on the subprime auto finance space.

The provider of used-vehicle service contracts sold through dealers went so far as to say that it’s “primetime for subprime” in a recent blog post.

“Subprime deals bring with them a unique set of challenges,” GWC Warranty wrote in this online offering.

“Whether it’s finding reliable lending, getting an advance for back-end products or simply working the deal to get a monthly payment your customer will agree to, there are plenty of reasons to tread lightly,” the company continued. “But if you look closely, you’ll see that the time is right to strike it big in the subprime market.”

GWC Warranty drilled deeper into the reasons for its optimism.

—Consumer confidence is riding high: GWC Warranty recapped that several reports released recently show that overall consumer confidence in the United States is approaching high-water marks not seen in decades. The company pointed out that the Conference Board Consumer Confidence Index, the Present Situation Index and the Consumer Confidence Survey all returned results that are nearing peaks they haven’t reached in almost 20 years.

—Default rates are holding steady: GWC Warranty maintained that a good indicator of how subprime customers are faring is how default rates move throughout the year. “This year, even outside the automotive industry, default rates have remained in acceptable ranges as customers continue to stay current on their loans,” the company said. “For credit cards, cars and mortgages, default rates are right where many economists expect them to be for this time of year.”

—Availability of financing: GWC Warranty acknowledged some “big players” may have backed out of the subprime space in recent months. “But this could spell more opportunity for the dealers willing to seek it out,” the company said. “With big national names backing off this market, it opens the door for local and regional lenders who know the sub-prime market well and understand how to successfully navigate these deals. These lenders will understand the value of back-end products to keep a customer on the road and will give you fewer headaches over including room for such products on your subprime deals.”

—Availability of back-end products: Once dealers land reliable financing that understands the value of a vehicle service contract on a subprime deal, GWC Warranty insisted that it’s all about finding the right product. “Some lenders may have one in mind that they prefer, but if you’re seeking it out on your own, you’ll be quick to find reputable providers that can provide quality coverage on vehicles with starting mileage as high as 200,000 miles,” GWC Warranty said. “These providers who specialize in high-mileage inventory will have the products designed to fit your subprime audience.”