The chart provides a detailed analysis of the credit distribution of outstanding auto loans as of December 2016, highlighting the varying levels of risk associated with different credit categories. Banks and credit unions exhibit a lower risk tolerance, with only 13.1% of their portfolios considered subprime. In contrast, finance companies are more open to risk, with 34.8% of their portfolios falling into the subprime category. The data reveals that a significant portion of finance companies' portfolios is in the subprime and deep subprime categories, indicating a higher risk exposure compared to banks. This trend suggests that finance companies are more willing to extend credit to borrowers with lower credit scores, potentially increasing their vulnerability to defaults. The overall distribution shows that while a substantial portion of loans is in the super prime and prime categories, a notable percentage remains in the riskier subprime segments. This distribution underscores the importance of monitoring credit risk in the auto loan sector, especially given the potential economic implications of a high concentration of subprime loans. The chart's color-coded segments provide a clear visual representation of the risk levels, making it easier to identify areas of concern and potential opportunities for risk mitigation.
