Just over five years after the Great Recession tightened consumer lending standards on everything from cars to houses, Experian Automotive is forecasting growth in the subprime market for 2014, including longer loan terms and increased delinquencies.
Experian Automotive Senior Director of Automotive Credit Melinda Zabritski says that though most vehicle financing is still in the prime lending market, the subprime market continues to grow as more lenders return to the space vacated en masse back in Q3 2008. Whether the market continues to grow depends on how many of those loans go into delinquency, though Zabritski expects a modest increase in delinquencies this year in comparison to the run-up to Q3 2008 beginning in 2007.
As far as the length of those loans are concerned, she sees 72-month terms becoming common as lenders compete for business while consumers negotiate for favorable monthly payments. The average term loan currently holds at 65 months, but Zabritski sees that average steadily climb as more 72-month loans are made with no sign of stabilizing five years forward, and terms over 100 months emerging soon.
from The Truth About Cars http://ift.tt/Jh8LjA
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