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Dealer-Assisted Financing Is Up

Nov 09, 2012

According to a recent report by, dealer financing is back to pre-recession levels after bottoming out in 2009. Analysts say the revival of the subprime market is driving the comeback, which accounted for nearly 25% of all new auto loans in the second quarter of 2012, up from a second-quarter low of 17.6% in 2009.There is still some pent-up demand from consumers unable to obtain financing during the recession, which will contribute to auto sales growth going forward as these consumers get access to credit.In order to provide a bit of perspective, new-vehicle sales funded by dealer financing fell 22% from 2007 to 2009, which, in turn, cut off potential buyers from credit and greatly contributed to the nosedive in auto sales. Only when dealers resumed offering financing deals to both prime and subprime buyers did the auto industry start to recover, according to Edmunds.