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ARTICLE · 18 NOVEMBER 2024

Is There A Bad Moon On The Rise?

Davis+Gilbert LLP
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What do you get when you add post-election uncertainty to pre-election "economic contradictions?" Many see trouble on the way, but after a period of mixed data and projections concerning interest rates.

United StatesFinance and Banking
Joseph Cioffi
Joseph Cioffi
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What do you get when you add post-election uncertainty to pre-election "economic contradictions?" Many see trouble on the way, but after a period of mixed data and projections concerning interest rates, consumer spending and borrowing, and of course, election results, the months ahead promise to bring some clarity to subprime auto.

Below is a review of recent performance and anticipated events on the road ahead.

Originations

At mid-year 2024, total auto loan balances stood at $1.63 trillion, up $10 billion for the second quarter.

Subprime auto originations continue to decline. For comparison, superprime originations in Q2 2024 were up 10.3% year over year. For borrowers with subprime credit scores, (credit score <620), the percentage of loans issued as of mid-year 2024 was only approximately 13.9% of total account balances, according to Equifax. The decline in subprime originations was 27.4% from Q1 2019 levels, according to TransUnion, citing affordability

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