Top Cars Purchased By Subprime Borrowers
Apply for a Loan
Secured with SHA-256 Encryption
UPDATED: Apr 29, 2013
Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.
A new report lists the top 10 car models chosen by subprime borrowers in the auto lending industry.
The CarFinance.com report highlights the vehicles most frequently purchased by all borrowers and compares them with the models chosen by subprime borrowers. The report measured both new and used vehicle purchases.
CarFinance president and CEO, Jim Landy, said it is important for the auto industry to watch and track vehicle preferences for below-prime borrowers. Below-prime car buyers now account for 43 percent of all car loans. A borrower is classified as below-prime when their FICO score is below 660.
Landy told loans.org that the list offers a consumer snapshot of realistic and viable automobile options for auto loan borrowers.
“Our data provides an illuminating new industry window into the purchasing behavior of what is a vast returning-to-car-buying population,” he said.
Despite one similarity, the new and used subprime borrower lists varied significantly. Over the last six months, below-prime buyers purchased the following ten new cars the most.
- Dodge Avenger
- Kia Forte
- Kia Optima
- Chrysler 200
- Dodge Journey
- Ford Focus
- Ram 1500
- Nissan Sentra
- Nissan Versa
- Kia Sorento
When below-prime borrowers choose a new car, they tend to focus on economical choices with good fuel economy. A longer manufacturer warranty, such as Kia’s 10 year and 100,000 mile warranty, was a contributing factor to its prevalence on the list.
Borrowers chose Chrysler, Kia and Nissan more frequently as a preferred auto manufacturer. CarFinance suggests this is due to the path created by domestic and Korean auto manufacturing brands in the small and mid-size segment.
When below-prime borrowers utilized auto loans for used cars, the findings differed. Instead of focusing on just fuel economy and warranties, borrowers chose larger vehicles.
- Ram 1500
- Nissan Altima
- Ford F150
- Dodge Charger
- Chevy Silverado 1500
- Chevy Impala
- Chevy Malibu
- Toyota Camry
- Chrysler 300
- Ford Mustang
For used models, borrower’s focus on pickup trucks and spacious family sedans. In fact, no compact vehicles made the list.
“This is a consumer looking for multi-use trucks and larger, fit-the-whole-family vehicles, but seeking those relatively high-cost vehicles at the significantly lower used price-point,” Landy said.
Despite wanting a larger vehicle, sub-prime borrowers may be less influenced by brands than prime borrowers.
“While prime borrowers may be more focused on finding a vehicle from a specific brand to meet their needs, subprime borrowers tend to be willing to look beyond that as long as the vehicle delivers the value they want for the price,” Landy said. “They may be less willing to pay a premium for a Honda Civic if a Kia Forte can deliver all of the same features, or more, for a little less money.”
Only one vehicle landed on both top 10 lists. The Dodge Ram 1500 was a top pick by below-prime borrowers for both new and used vehicles.
Both CarFinance lists can be compared to national totals for car buying. The vehicles purchased most frequently in the United States were significantly different list. According to data from the National Automobile Dealers Association (NADA), the top 10 vehicles sold in the United States are:
- Ford F Series
- Chevrolet Silverado
- Toyota Camry
- Honda Accord
- Honda Civic
- Nissan Altima
- Toyota Corolla/Matrix
- Ram Pickup
- Ford Escape
- Honda CRV
Although Honda and Toyota are mostly absent from the below-prime list for new and used, they dominate in the overall vehicle list, accounting for half of the models. The national list is less divided, small versus large, as the previous two lists.