NAF Association Industry Survey: Roadmap for the Non-Prime Vehicle Finance Industry

For 22 years the National Automotive Finance Association (NAF) has produced a report of the nonprime auto financing market. The 2018 Non-Prime Automotive Finance Survey is jointly coordinated with the two premier professional organizations in automotive finance: NAF Association (the National Automotive Finance Association) and AFSA (the American Financial Services Association). This report serves as a key source of benchmarking for those who participate in or support non-prime automotive financing.

  In addition to key financial metrics, this report helps to promote best practices and collective knowledge of leading industry professionals to ensure that financing companies can meet their portfolio goals and work effectively with their dealers, liquidity providers, vendors and other partners to create compelling customer value.

  This year’s data survey has been managed by FICO and provided the analysis and conclusions in the report.

 The 2018 report represents 40 financing sources and $34.6 billion (year end 2017) in principal balance, an increase for the seventh consecutive year.

Key findings from the survey include:

  • Non-prime portfolio balances have increased 5.3% year-over-year in 2017, however the number of loans originated in each of the last two years has decreased
  • Competition remains robust overall but niches of underserved sub-segments still exist
  • Financial metrics were mixed overall and softened for some
  • Automated origination activity is increasing
  • Rise in dealer, first-party and synthetic identification fraud
  • Used vehicle depreciation was mitigated by destructive hurricanes, which increased the demand for used vehicles
  • The customers of non-prime auto finance companies represent mainstream America

The report provides information that cannot be found anywhere else. Contributing to the report are Black Book and TransUnion who provided additional market insight by supplying data and analysis on their non-prime auto financing databases.

The survey report is distributed at no cost to finance company participants. Others may purchase a copy of the report for $500. Ordering is available online at nafassociation.com.