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Fri Oct 25, 2019, 11:00 AM

Subprime Auto Giants Loans Souring at Fastest Clip Since 2008

Oct. 25, 2019 10:21 AM ET|About: Santander Consumer USA Hold... (SC)|By: Liz Kiesche, SA News Editor

Santander Consumer USA Holdings (SC +0.2%), one of the largest subprime auto lenders, is seeing some subprime loans that it made last year sour at the fastest rate since 2008, as more consumers than usual default soon after borrowing, Moody's Investors Service analysts said.

Though subprime auto loans aren't in a crisis, subprime auto lenders are facing more difficulty. Delinquencies for auto loans in general are at their highest levels this year since 2011, Bloomberg reports.

Many of those bad loans were packaged into bonds. When the debt turns bad soon after the securities are sold, the company is required to buy the loans back, putting the potential losses onto the original lender and away from the bond investors.

“This could eventually be a problem for the company and impact its actual performance,” Kevin Barker, an equity analyst at Piper Jaffray, told Bloomberg News.

more...

https://seekingalpha.com/news/3509732-santander-consumer-usa-subprime-loan-delinquency-rate-picking-bloomberg

https://www.bloomberg.com/news/articles/2019-10-25/subprime-auto-giant-s-loans-souring-at-fastest-clip-since-2008

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Reply Subprime Auto Giants Loans Souring at Fastest Clip Since 2008 (Original post)
RCW2014 Oct 25 OP
nolidad Oct 25 #1

Response to RCW2014 (Original post)

Fri Oct 25, 2019, 11:39 AM

1. with over 7,000,000 loans 90 days late or later it is going to get ugly!

It shouldn't surprise anyone. with the cheapest new vehicles going near $20,000 and the popular trucks start at around $50,000 people are reaching far beyond what they can afford! we now have 8 year car loans!! By the time you pay half it off- you are underwater on your loan!

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