Subprime auto lending activity reaches new post-crisis low

By Jennifer Kang
31 Mar 2021

Subprime and deep subprime auto lending activity has reached its lowest level since the 2008 financial crisis, as the pandemic forced lenders to take a cautious approach. But this has also helped soothe concerns market participants had about the resilience of the sector to another crisis. Tighter criteria has meant the quality of borrowers in subprime pools is improving, which should lead to better performance in subprime auto securitizations, sources say.

Ever since the pandemic struck in March 2020, subprime and deep subprime auto loan origination has plumbed new lows as lenders tightened their underwriting criteria out of caution. The market also saw more prime borrowers take advantage of lending, mostly due to the fact that used ...

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