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Subprime financing on the rise in new car sales, leasing too

We all remember the financial crisis that began several years back. At its core was a splurge of subprime lending for housing loans. The housing bubble burst, triggering a collapse of the mortgage-backed securities market. Apparently, those types of loans still exist in the automotive industry, and the market share for these types of "nonprime, subprime, and deep subprime," loans has grown 13.6 percent compared to the third quarter a year ago.
According to an Automotive News report, high-risk lending expanded to 24.8 percent of total loans in Q3, up from 21.9 percent for this time last year. As this level increased, average credit scores of borrowers dropped to 755, down from 763 a year ago. In that time, the average financing amount increased $90 per vehicle, to $25,963.
At 818, Volvo maintains the highest per-owner credit score, while Mitsubishi has the lowest, at 694. The highest rate of borrowers was at Toyota, with 14 percent of the market, followed by Ford with 13.1 percent and Chevrolet at 11.1.

U.S. new-vehicle sales in 2018 rise slightly to 17.27 million [UPDATE]

DETROIT — Sales of new vehicles in the U.S. rose slightly in 2018, defying predictions and highlighting a strong economy. Automakers reported an increase of 0.3 percent over a year ago to 17.27 million vehicles. The increase came despite rising interest rates, a volatile stock market, and rising car and truck prices that pushed some buyers out of the new-vehicle market. Industry analysts and automakers said strong economic fundamentals pushed up sales and should keep them near historic highs in 2019. "Economic conditions in the U.S. are favorable and should continue to be supportive of vehicle sales at or around their current run rate," Ford Chief Economist Emily Kolinski Morris said after the company and other automakers announced their sales numbers Thursday. That auto sales remain near the 2016 record of 17.55 million is a testimonial to the strength of the economy, said Mark Zandi, chief economist at Moody's Analytics. The job market, he said, has created new employment, and wage growth has accelerated. "That's fundamental to selling anything," he said. "If there are lots of jobs and people are getting bigger paychecks, they will buy more." The unemployment rate is 3.7 percent, a 49-year low. The economy is thought to have grown close to 3 percent last year, its best performance in more than a decade. Consumers, the main driver of the economy, are spending freely. The Federal Reserve raised its key interest rate four times in 2018 but is only expected to raise it twice this year. Auto sales also were helped by low gasoline prices and rising home values, Zandi said. It all means that people are likely to keep buying new vehicles this year even as they grow more expensive. The Edmunds.com auto-pricing site estimates that the average new vehicle price hit a record $35,957 in December, about 2 percent higher than the previous year. It will be harder for automakers to keep the sales pace above 17 million because they have been enticing buyers for several years now with low-interest financing and other incentives, Zandi said. He predicts more deals in the coming year as job growth slows and credit tightens for higher-risk buyers. Edmunds, which provides content, including automotive tips and reviews, for distribution by The Associated Press, predicts that sales will drop this year to 16.9 million.

Mustang retakes monthly pony car sales crown from Camaro

Going back to their origins in the Swinging '60s, the Ford Mustang and Chevrolet Camaro have been fierce rivals for fans' hearts and dollars. Historically, the Ford often led in volume, but Chevy took the muscle car top spot in 2009 upon the Camaro's rebirth. However, with the launch of the latest Blue Oval pony car, the tide is turning back in Ford's favor. November was the first full month of sales for the new 2015 Mustang, and according to TheDetroitBureau.com, the model did spectacularly well. The Blue Oval shifted 8,728 of them, up 62 percent from same month last year, with the automaker proclaiming it the model's best November sales since 2006. Conversely, 4,385 units of the Camaro were delivered, down 13.5 percent year-over-year, meaning its sales were roughly half that of the new-generation Mustang. Ford is understandably happy with the results, and product development director Raj Nair even hinted to TDB that another version of the Mustang might be unveiled at January's North American International Auto Show. Rumor has it that the model will be the even more potent Shelby Mustang GT350R. Despite the Mustang's November success, the Camaro outsells it year to day. So far in 2014, Ford has sold 73,124 Mustangs versus 79,669 examples of the Camaro. With December offering the last chance for an overtake, the Bowtie may yet remain king for this year's sales crown. A new Camaro is peeking over the horizon, as well. It's reportedly moving to the Alpha platform used by the Cadillac ATS, and production could start in late 2015. Prototypes are already testing at the Nurburgring, and camouflaged examples have been spotted weirdly being compared to its '80s forefather.