Today’s credit-challenged auto consumers are different from the ones during the recession of a decade ago, says Lou Loquasto of credit-tracker Equifax.
“The customer with a 550 credit score now is not the same as the person with a 550 score when the housing market collapsed and they were affected by it,” he says. “Today, a person with that score has a systemic difficulty” as a borrower. It’s not a victim of circumstances who got hit with an unexpected financial blow.
But that doesn’t mean auto lenders should automatically decline latter-day subprime people, Loquasto, Equifax’s auto finance leader, says at the American Financial Services Assn.’s annual vehicle finance conference held in conjunction with the upcoming National Automobile Dealers Assn. convention and expo here.
“Ninety percent of people, when given a second chance, made good on that second chance,” he says. “But we need to know everything we can know about that customer.”