In February, Experian Automotive announced that U.S. automotive loan balances climbed 11.5 percent to reach $987 billion in the fourth quarter of 2015, according to its most recent State of the Automotive Finance Market report.

This is the highest amount on record since Experian began publicly tracking the data in 2006, one year before the Great Recession began in 2007. According to Melinda Zabritski, Experian's Senior Director of Automotive Finance, "The boost in automotive sales has contributed to a strong quarter for all lender types across the industry." This means that in addition to prime credit markets, the subprime sector is also doing well, which is good news for consumers with bad credit.

However, even though loans have become more attainable for subprime buyers, it is important to keep in mind that this trend will only continue as long as buyers continue to make on-time payments and stay current on their loans. The report shows that while 30-day delinquencies are down across the board, 60-day delinquencies grew from 0.72% to 0.77% across all lender types, with the exception of credit unions. "Given that we've seen an increase in loans to subprime and deep-subprime consumers, it's natural to see a slight uptick. Although not yet a cause for concern, the industry should keep an eye on this metric to see how it trends in the quarters to come," says Zabritski.

Ways for Subprime Borrowers to Maintain On-Time Payments

As long as buyers are able to keep up on their monthly auto loan payments, the lending market could continue to show growth and allow borrowers of all credit types to continue to get loan approval.


  • Know your due dates
    When you are trying to repair or maintain your credit, it is important for you to know when your payments are due and to have the funds ready to pay them on time. By doing so, you will build a strong credit history and have a better chance of getting approved for prime interest rates when you apply for new financing.
  • Continue to adhere to your budget
    Having a budget will allow you to keep track of where all your hard-earned money is going, and will help you stay on track with your payments, as well as show you where you could find potential opportunities to save some money.
  • Have an emergency fund
    Building an emergency fund will help you keep up with all of your bills if an unforeseen event or emergency presents itself.

Looking for Auto Financing? We Can Help

At Drivers Lane, we connect bad credit car buyers with car dealers that work with lenders who specialize in providing subprime auto financing. Once you have completed the fast, secure and obligation-free online application, we will arrange a time for you to meet with the selected dealer's finance manager. They will then do everything possible to get you approved and into a reliable car you can afford. Start today.