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Near- and Non-Prime Consumers Face Shrinking Access to Automotive Financing in 2023, Open Lending Research Finds
Lending enablement provider shares first-in-series quarterly data report on automotive lending trends in near- and non-prime credit segments AUSTIN,
About this update from Open Lending Corporation
[{"type":"text","content":"\nLending enablement provider shares first-in-series quarterly data report on automotive lending trends in near- and non-prime credit segments\n\n\n AUSTIN, Texas--(BUSINESS WIRE)--\nOpen Lending Corporation (NASDAQ: LPRO) (“Open Lending” or the “Company”), an industry trailblazer in automotive lending enablement and risk analytics solutions for financial institutions, today released its first Near- and Non-Prime Consumer Update, a quarterly proprietary data report on automotive lending trends in the near- and non-prime credit segments.\n\n\nUsing data on new and used vehicle loan originations, interest rates, sales and more, the report illustrates how current macroeconomic and automotive market trends shape vehicle accessibility for consumers with credit scores below 699. These trends provide critical insights for automotive lenders on how to serve near- and non-prime borrowers while managing risk and exceeding ROA targets.\n\n\n“Between high interest rates and increased vehicle prices, car ownership is out of reach for many underserved but qualified consumers today — an obstacle that makes it difficult to build a better life. For automotive lenders, this is an opportunity to engage near- and non-prime borrowers and start long-term, mutually beneficial relationships,” said Matt Roe, Chief Revenue Officer of Open Lending. “At Open Lending, we’ve been keeping a pulse on this market for over twenty years and are excited to start sharing quarterly insights that automotive lenders can use to drive vehicle accessibility with AI-powered decisioning and risk analysis while building resilient portfolios.”\n\n\nKey findings from the report include:\n\n\n\nNear- and non-prime consumers face diminishing access to automotive financing.\n\nIn the third quarter of 2023, used car originations for near- and non-prime borrowers fell 33% year-over-year. Comparatively, used car originations for prime borrowers fell 22% year-over-year.\n\nAdditionally, the Federal Reserve’s rate increases have disproportionately impacted near-and non-prime borrowers. By the second quarter of 2023, near- and non-prime registrations decreased by 7,000 for every basis point increase in the interest rate. Prime registrations, on the other hand, continued to rise steadily despite the rate increases.\n\n\n\n\n\nAmong near- and non-prime consumers, Chevrolet is the top ch...