Industry Analysis & Industry Trends
The Subprime Auto Loans industry is rebounding strongly from effects of the recession, but performance still remains below prerecessionary levels. New car sales, improving consumer finances and continued strong demand growth from subprime borrowers and investors are forecast to spur industry growth over the next five years. However, faster growth will be restrained by rising interest rates that will raise borrowing costs and slow vehicles sales.... purchase to read more
Industry Report - Industry Investment Chapter
The level of capital intensity in the Subprime Auto Loans industry is medium. Capital intensity increases, as many companies offer sales financing in combination with leasing. In the provision of funds, firms often purchase installment sale and lease contracts for new and used equipment, mainly through dealers. When companies purchase installment sale contracts, they hold a security interest in the equipment purchased through the contract. The priority of the security interest is protected against claims from other creditors, usually through lien notation on equipment titles.
Despite the industry being moderately capital intensive, there is a large reliance on labor in carrying out the administrative tasks associated with financing loans and leases... purchase to read more