Subprime Loans Boost Car Sales

January 21, 2014 
auto financing news
Home and auto sales historically have moved higher or lower in tandem, but lately auto sales have been rising at a much faster clip than real estate sales. The main reason for the disparity is that auto lending standards have become very relaxed over the past three years, according to a new report from real estate research firm CoreLogic.

The report quotes JPMorgan Chase as saying that subprime lending accounted for about one in four car loans in 2013, up from just one in 20 in 2009. By contrast, mortgage lending remains very tight, with only the most qualified borrowers receiving credit. "In the absence of subprime lending, auto sales would be massively lower," wrote CoreLogic analyst Sam Khater.

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