BANDON, Ore. — Subprime buyers, and the dealers trying to finance them, are finding it more difficult than ever to get approval for a new-vehicle loan, according to Art Spinella, of CNW Research.

"For all levels of new-car shoppers — prime, near-prime and subprime — the share of loan applications that are eventually approved are off to varying degrees versus a year ago," Spinella explained.

"Hardest hit, not surprisingly, are subprime buyers who saw their eventual approval falling from nearly 68 percent to about 57 percent. Not seen in those statistics, the lowest of the subprime potential buyers are virtually non-existent this year," he added.

Essentially, 1.38 percent of all loan approvals were subprime in the first quarter, compared to more than 12 percent a year ago.

Additionally, Spinella pointed out that dealers have to send consumer credit applications to more lenders to get approval this year, and this includes consumers who have high credit scores.

"In the opening weeks of this year, prime borrowers' applications went to more than three different financial institutions before landing a loan, compared to 1.8 during the same period a year ago," he highlighted. "For subprime, it took 5.6 institutions compared to 4.2 a year ago."

So basically, Spinella summed it up by saying, "There is no doubt that current-year 2008 will be a tough year. But the impact of housing, credit and other economic factors shouldn't be broad-brushed against the entire country.

"There are pockets still doing well, including the agricultural Midwest, where some dealers are having near-record vehicle sales. The California and Florida markets, because they represent such a high percentage of total U.S. sales, are dragging down the national statistics. Pure retail sales in California, for example, are off between 12 and 14 percent, with floor traffic down nearly 20 percent," he said.

Additionally, Spinella found that the average transaction price for a vehicle was $25,983 this year, while it was $26,174 last year.


Share of Loan Applications Eventually Approved


Jan. 1 to March 20: 89.61 percent

Jan. 1 to March 20, 2007: 92.45 percent



Jan. 1 to March 20: 85.28 percent

Jan. 1 to March, 20, 2007: 87.18 percent



Jan. 1 to March 20: 56.77 percent

Jan. 1 to March 20, 2007: 67.82 percent


Institutions Shopped Before Acceptance


Jan. 1 to March 20: 3.1

Jan. 1 to March 20, 2007: 1.8


Near Prime

Jan. 1 to March 20: 3.8

Jan. 1 to March 20, 2007: 2.4



Jan. 1 to March 20: 5.6

Jan. 1 to March 20, 2007: 4.2 percent

For more information, visit