That's good news for both manufacturers and consumers, as it shows that both credit is becoming more readily available and people are actually using said credit to buy new cars. The highest jump in originations was below prime risk – credit scores of 621 to 660 – which saw a 16-percent jump and represented $12.1 billion.
And while there should be concern about lending to the unqualified, the Fed report that AN used as a source cautions that, "While originations to borrowers with the lowest credit scores have increased, they are just recently approaching historically normal levels and are below those that we saw during the boom years leading up to the crisis."
There are other reasons to be concerned, though. It's unclear how long this uptick will continue, considering that the trend for financing is towards longer terms and people are hanging onto their vehicles for longer. Baby Boomers are also making up an unequal proportion of sales, and there's also the trendy concern over the relationship between people and the car. While it's great to see such a positive rise in lending, it's important to remember that we aren't out of the woods yet.