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Subprime auto delinquencies are up …

 

Delinquencies are on the Rise

Are you prepared? You may have seen some of the headlines today citing an uptick in delinquencies for subprime automotive borrowers. Or maybe you’ve even experienced it personally over this past year. Whatever the case, auto loan defaults are at nearly 9% today and Fitch Ratings is projecting them to reach 10% by the end of 2016.

The stats and trends below most likely prompt BHPH dealers and vehicle finance companies to re-evaluate what measures they are taking to ensure their vehicle assets and bottom line are protected:

  • 86% of American workers use automobiles to get to work every day – U.S. Census Bureau
  • The total number of auto loans hit an all-time high of $1 trillion in Q2 of 2016, up 10% from the previous year – Experian
  • 22% of all auto loans are subprime loans – Standard and Poor’s
  • Auto delinquencies have risen every month since February 2016 – USA Today
  • Approximately, 1-in-3 credit challenged consumers will default on their BHPH car loan – NABD Benchmark Trends 2015
  • Most of the defaults occurred within 7 months of securing the loan – NABD Benchmark Trends 2015
  • Customers who were 60 days or more behind on payments, reached 4.86% in August 2016, a 22% increase from August 2015 – Fitch Ratings
  • Losses on bonds backed by risky car loans were at 8%, a climb of over 27% in August 2016 from a year ago – Fitch Ratings
  • 12% of car buyers took out a loan with longer repayment periods than the amount of time they planned to own the vehicle – MarketWatch
  • In May 2016, Auto lenders collected around 63% of the outstanding loan balances that were in default, down from 67% a year prior – Jefferies Investment Banking Firm

So if you’re wondering how you can be better prepared when a customer stops paying and the vehicle you financed disappears, the answer is GPS technology.

Reduce Your Risks with GPS Technology – The Ultimate Protection

GPS technology is a proven technology that lowers your risks and the costs associated with recovering a vehicle should the need arise. And although there are many GPS service providers out there, not all were created equally.

STARS GPS has a progressive risk mitigation system that provides BHPH dealers and vehicle finance companies the most advanced GPS technology available. The system includes a suite of smart tool sets all designed to immediately locate your vehicle assets at any given moment. STARS gives you:GPS Tracking - 5 Minute Breadcrumbs - STARS GPS

  • Instant locates and real-time GPS tracking in 5-minute increments for moving vehicles
  • Geofences instantly mapped out around nearby impound lots for you
  • All knowing GPS dashboard
  • Push notifications with vehicle details to repo agent when a recovery is necessary
  • Simple e-transfer of devices
  • Rolling list of top stops
  • All in one login access
  • Warranties and special offers
  • And more …

And unlike those big GPS service providers who say they are the leaders in this market as well as many other markets too, STARS GPS only focuses on you. For over 10 years, our team has been dedicated to the subprime market and our specialty is risk mitigation.

The Fitch report also indicated that these trends will lead to lower recoveries in auto-backed securities. Now’s the time to make sure your assets and your bottom line is protected. We do more than just monitor your assets; we fix the problem.

To speak to one of our risk mitigation specialists today, call 1-844-807-9590 or provide us with your information below and we’ll give you a call:

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