The subprime lender sector has be making gains, moving towards its pre-recession market share. Along with the reemergence, there has been a loosening of lending restrictions, allowing lower credit scores to be approved.
Bad credit auto loans accounted for 21.9% of new car loans last quarter, up 14.8% over the same quarter last year. Another aspect of the trend is that delinquency rates are steadily declining. Credit scores being approved have continued to drop as the delinquency rate drops.
One odd fact is that the used cars being bought are older than in previous quarters. Possible reasons for that trend toward older used car loans could be the recession and the disasters in Japan in March of 2011. Both forced consumers to hold on to their cars longer, which now creates an older fleet of cars sitting on used car dealers lots. These older cars are priced slightly lower, which allows lenders to approve lower credit scores without facing as high a dollar amount risk.
Lending restrictions and levels are not back to pre-2008 levels as yet, but they are well on their way.