Who is making loans to sub-prime auto buyers?

Liberty Street: As we noted in an earlier blog post, one feature of our data set is that it enables us to infer whether auto loans were made by a bank or credit union, or by an auto finance company. The latter are typically made through a car manufacturer or dealer using Equifax’s lender classification. Although it remains true that banks and credit unions comprise about half of the overall outstanding balance of newly originated loans, the vast majority of subprime loans are originated by auto finance companies. The chart below disaggregates the $1.135 trillion of outstanding auto loans by credit score and lender type, and we see that 75 percent of the outstanding subprime loans were originated by finance companies. 

The emphasis is mine. Should we worry? A little, but auto finance companies are much better at re-possession and resales of used cars, traditional banks don't do that much.  But it has to be clear to investors that this is a partial measure of  'leasing'  rates as many of these cars will recycle according to  plan.