CNW: December Subprime Credit Applications Jump Sharply
December 20, 2011
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BANDON, Ore. — According to the latest data from CNW Research, all credit application categories posted significant increases in December versus a year ago — especially subprime.
In fact, subprime made the largest jump of the three categories CNW listed, rising 53.9 percent.
Non-prime rose 20.1 percent year-over-year, while prime approvals moved 12.5 percent higher.
With credit approval conditions strengthening, CNW president Art Spinella projected positive gains for both new- and used-vehicle sales next year.
"If the October-December trend continues and the Wish List for 2012 holds up, the industry could easily top 13.5 million new units next year," Spinella estimated. "For used cars, the numbers are equally solid and topping 40 million is possible."
Even on higher volume and higher share of vehicles being financed, CNW acknowledged the pre-approval rate slipped from 7.9 percent to 7.6 percent in November versus a year ago.
But analysts pointed out the number of subprime buyers across all channels jumped more than 13 percent to 419,713 vehicles, compared to 370,787 units financed during November of last year.
CNW added the buy-here, pay-here segment enjoyed both a unit and a share increase during November versus a year ago, which according to Spinella is "showing the ability of these lower-demographic buyers to increasingly nail down credit."
Lease Satisfaction on the Rise
As leasing makes a noticeable comeback, CNW discovered the satisfaction with this financing option continues to rise to pre-recession levels.
Analysts explained the latest data through November shows consumers who leased a car or truck this year rated their satisfaction with leasing at 8.6 on a 10-point scale.
CNW noted individuals who were second (or more) time lessees, the satisfaction level has remained fairly steady since 2000, between 8.5 and 9.0.
"Among lease outlets, independent lease companies rank highest in customer satisfaction versus captive finance companies or financial institutions," Spinella stated.
Editor's Note: Auto Remarketing published CNW's analysis of how independent dealers are finding inventory and more in a story available here.
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