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August 15, 2014

Auto loans soar, especially subprime

  • Auto loans are packaged into securities and sold to investors, and that could amplify the impact of defaults.
    • By CHRISTOPHER S. RUGABER
    AP Economics Writer

    WASHINGTON — U.S. auto loans jumped to the highest level in eight years this spring, fueled by a big increase in lending to risky borrowers, according to a report Thursday by the Federal Reserve Bank of New York.

    Yet the New York Fed also said that loans to borrowers with shoddy credit, also known as subprime lending, still make up a smaller proportion of total auto loans than before the Great Recession.


     
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