Smooth ride: Greater car sales and investor interest will drive industry growth

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 Statistics & Market Size
Annual Growth 11-16
Forecast Growth 16-21

Industry Threats & Opportunities

  • New car sales, improving consumer finances and strong demand are forecast to spur industry growth
  • Low interest rates helped fuel resurgence in subprime consumer demand for auto financing
  • Car sales will surge past prerecessionary highs, driving demand for subprime auto financing
  • Industry Report - Industry Analysis Chapter

    The Subprime Auto Loans industry is composed of banks, credit unions, financing companies and captive firms that underwrite automotive loans for subprime borrowers, defined in this report as consumers with a credit score below 600. Subprime borrowers have low FICO credit scores caused by limited or spotty credit histories and imperfect information on their financial status that restricts their access to credit. They are more sensitive to “cash in hand,” or liquidity constrained, which means they are riskier borrowers with higher probabilities of delinquency and default compared with the overall automotive finance market.According to Experian Automotive, 88.3% of industry revenue comes from automotive loans and 11.7% comes from automotive leases. An estimated 80.8% o...purchase to read more.

    Additional Insights for the Subprime Auto Loans Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Subprime Auto Loans Industry are

  • Well-developed internal processes
  • Financial position of the company
  • Ability to raise revenue from additional sources
  • IBISWorld analysts also discuss how external factors such as New car sales and Yield on 10-year Treasury note in the Subprime Auto Loans industry impact industry performance..

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    What's in this report

    What is the Subprime Auto Loans Industry?

    This industry includes firms that finance automobile purchases through loans and leases for subprime borrowers, defined in this report as borrowers with a credit score below 620.

    Industry Products
  • New vehicle loans
  • Used vehicle loans
  • Industry Activities
  • Subprime automotive lending
  • Subprime automotive leasing
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • New car sales
  • Yield on 10-year Treasury note
  • Per capita disposable income
  • Aggregate household debt
  • Consumer Confidence Index

  • Current Performance
  • Low interest rates and investor demand
  • Recession impacts industry landscape
  • Chart: Revenue Growth

  • Industry Outlook
  • Rising income and low interest rates
  • Increased demand and profit
  • Table: Subprime Auto Loans Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Subprime Auto Loans Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Open-End Investment Funds
  • Retirement & Pension Plans

  • Products & Services
  • Used vehicle loans
  • New vehicle loans
  • Chart: Subprime Auto Loans Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Deep subprime borrowers
  • Subprime borrowers
  • Chart: Major Market Segmentation for the Subprime Auto Loans Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Interest expenses and loan write-offs
  • Wages
  • Other expenses
  • Chart: Cost Structure Benchmarking – Sector vs Subprime Auto Loans

  • Basis of Competition
    Automotive financingSecuritization vehicles
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Subprime Auto Loans Industry

  • Industry Globalization
    Ally Financial Inc., Honda Motor Company, Toyota Motor Corporation,
  • Table: Ally Financial Inc. - financial performance
  • Table: Honda Motor Company - financial performance
  • Table: Toyota Motor Corporation - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Subprime Auto Loans Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Subprime Auto Loans Industry
  • Industry Revenue (2007-2021)
  • Industry Gross Product (2007-2021)
  • Establishments (2007-2021)
  • Businesses (2007-2021)
  • Employment (2007-2021)
  • Wages (2007-2021)
  • New car sales (2007-2021)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Buy Here, Pay Here (Bhph)
  • A financing option at some dealerships in which customers secure car loans without providing their credit history. As a general rule, a down payment and proof of income are the only items required.
  • Deep Sub-Prime Auto Loans
  • Auto loans made to consumers whose credit scores are lower than 550.
  • Nonprime Auto Loans
  • Auto loans made to consumers with credit scores that range between 620 and 679.
  • Subprime Auto Loans
  • Auto loans made to consumers whose credit scores range from 550 to 619.
  • What Our Customers Say

    Why buy this report?

    The Subprime Auto Loans Industry Research Report measures market size, analyses current and future trends, and provides an indication of market share for the industry’s largest companies. IBISWorld’s collection of industry market research reports gives you insightful, up-to-date information on the supply chains, economic drivers, and key buyers and markets for hundreds of industries.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Subprime Auto Loans:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Subprime Auto Loans market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Subprime Auto Loans, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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