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Reacquaint Yourself with the Subprime Customer

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Reacquaint Yourself with the Subprime Customer

By Dave Meyer, Executive VP

As the subprime automotive finance market continues to regain momentum, now is the perfect time to take a closer look at the subprime auto loan customer. What you see may actually surprise you. There are a lot of preconceptions out there about the subprime customer. When we hear subprime, we tend to think of someone who’s jobless, broke, doesn’t pay his bills, won’t answer the phone, and shirks his responsibilities. But this stereotype doesn’t take into account the dramatic economic changes that have redefined our notion of who the subprime customer really is.

The vast majority of today’s subprime customers didn’t always have bad credit or a bad reputation for slacking on their bills. In fact, many of these customers owned homes and had well-paying jobs up until the financial crisis and mortgage meltdown hit, and hit hard. A large number of these home-owning, job-holding consumers lost their homes and careers, forcing them to deplete bank accounts and file for bankruptcy. This in turn decimated their good credit.

Now that the economy is in recovery mode, the housing marketing is stabilizing and even showing signs of growth, and employment is inching back up, many of these economically stricken consumers are landing back on their feet. They once again have well-paying jobs with salaries, a good debt-to-income ratio, and every intention of paying their bills on time. During tougher economic times, they held on to their old cars for longer periods. Now they’re ready, willing and able to transition to higher value vehicles. All they need is the financing to do it.

While their financial footing may be stronger, these consumers are still saddled with damaged credit scores — making it difficult for them to qualify for traditional financing. This leaves a large and growing untapped market of subprime automotive customers looking for non-traditional financing to purchase better vehicles. That’s where you come in.

With the right subprime strategy in place, you have the opportunity to capture this untapped market opportunity. But you’ll also need ways to reduce the potential risk and protect your vehicle assets while serving the subprime market. GoldStar GPS and LoanPlus CMS offer two proven solutions to help you broaden your reach to include subprime customers coming out of the recession with low credit scores but a higher likelihood of making their payments on time.

With GoldStar GPS and LoanPlus CMS, you’ll be able to say yes these customers with added confidence, knowing you can help your customers stay on track with their payments, reduce delinquencies and defaults, as well as quickly, cost-effectively recover vehicles when necessary. While increasing your sales and revenues, you’ll also be helping credit-challenged customers repair their credit and transition into higher value vehicles. And that’s good news for everyone.

To learn more about the changes in the subprime customer and market, read our white paper titled “Will You Be Ready for the Next Automotive Finance Storm?” Or visit our websites at and

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