U.S. auto finance volume rebounded overall in the third quarter for newly originated loans and leases, but not so much for borrowers with subprime credit, according to the latest Quarterly Report on Household Debt and Credit from the New York Federal Reserve.
In total, originations were $168.2 billion in the third quarter, the New York Fed reports. That was an increase of 5.7% vs. third-quarter 2019 and, more to the point, an increase of about 24% over the second quarter, when the worst of pandemic-related business shutdowns took hold.
The New York Fed reports newly originated loans and leases were $135.9 billion in the second quarter of 2020, down 12.7% vs. the same quarter last year. Those figures include new and used cars and trucks.
Proportionately, borrowers with subprime credit missed out on the rebound in the third quarter. Subprime loans and leases were down 6% vs. a year ago in the third quarter, while prime-risk loans and leases increased. The New York Fed defines subprime as credit scores below 620.
