Although the percentage of subprime auto loans increased in the second quarter of 2013, the percentage of auto loan delinquencies dropped during the same period, according to a report recently released by Experian Automotive, an auto loan industry tracking service.
More than 35 percent of the new auto loans approved from April through June were for subprime consumers, a tick higher than the 34.9 percent that went to the same group of buyers in the second quarter of 2012. Subprime buyers have credit scores of 700 or lower.
The good news is that more people are paying their car loan payments on time. A mere 2.4 percent of auto loans were 30 days or more delinquent in the quarter, a significant drop from the 5.6 percent of a year ago. In fact, Experian says that this is the lowest showing for this second-quarter indicator since 2006.
The total auto loan outstanding balance increased by 10 percent year-over-year for the quarter to reach $751 billion.