BANDON, Ore., and CHICAGO — Part of the reason CNW Research
projected used-vehicle sales to climb by more than 8 percent this month is the
soaring number of subprime loan approvals.

According to the firm's September Retail Automotive Summary,
subprime approvals for both new- and used-vehicle sales are 62.5 percent higher
this month than they were a year ago.

"Like the new-car market, all dealers are finding it easier
to place subprime used-vehicle paper," CNW president Art Spinella stated.

Breaking down its sales predictions, CNW thinks franchised dealers
will turn 1.33 million used models this month, marking an 11.7 percent gain.

Thanks to inventories and supply becoming more stable and
improvements in inventory make-up, the firm contends independent dealers are
looking at a significant year-over-year used sales gain in September. Expectations
are for independent lots moving 1.28 million units, which would translate into
a 9.7-percent jump from a year ago.

"Expect continued strong showings for independent dealers
over the coming quarter as long as the supply issues continue to improve and
new-car dealers have solid trade-in volumes," Spinella projected.

"There was a slight weeding-out process over the summer
eliminating some weaker indies," he pointed out. "CNW expects the loss of 200
to 500 used-car outlets by the end of the year."

TransUnion: U.S. Credit Risk Declines Despite Increases in
Consumer Borrowing

Meanwhile, TransUnion's proprietary Credit Risk Index — a
measure of the risk inherent in the U.S. credit-using population — decreased in
the second quarter, reversing the increases seen in the prior two quarters.

Quarter-over-quarter, analysts discovered the second quarter
CRI for the U.S. decreased 1.57 percent from 123.98 to 122.03. On a
year-over-year basis, the CRI had a nominal 0.66 percent increase.

TransUnion reiterated a higher index indicates a higher
level of credit risk.

"After upticks in the prior two quarters, it was good to see
the credit risk level decline this quarter to roughly the same level it was
last year," explained Charlie Wise, director of research and consulting in
TransUnion's financial services business unit.

"Delinquency rates for major loan types have all declined in
the first half of 2012, and that contributed to the drop in the risk index in
the second quarter," Wise continued.

On a related note, the firm discovered demand for consumer
credit showed an increase of 21.4 percent in the second quarter from the same
period a year ago as measured by TransUnion's Total Inquiry Index. This
increase brought the TII to the highest quarterly level since the third quarter
of 2007, which was before the start of the past recession.

"The increase in consumer-initiated inquiries indicates
stronger consumer demand for credit, and may be a signal that consumers are
beginning to increase their spending on discretionary items and larger-ticket
purchases, reflecting stronger consumer sentiment and confidence toward the
U.S. economy," Wise highlighted.

As TransUnion has been reporting, delinquency rates for
major consumer loan types, including bankcard, auto, and mortgage, all declined
on a quarter-over-quarter basis in each of the first two quarters of this year.

Furthermore, analysts pointed out delinquency rates for each
of these loan types remained flat or declined year-over-year. They explained these
improvements in loan delinquency rates have offset moderate increases in
consumer borrowing over the past year, including increases in auto loan
balances and increases in the average bankcard balance per consumer.

"Consumers have stepped up their borrowing over the past
year, particularly in bankcards and auto loans," Wise noted. "New card and auto
loan originations have both grown over the past year, and average balances per
consumer for both these loan types increased between Q2 2011 and Q2 2012.

"Despite those increases, we are pleased to see that
delinquency rates have remained flat or declined," he went on to say. "Consumers
are maintaining consistent payment behavior on their bankcards and auto loans,
as well as on mortgages, which is the key reason why the U.S. Credit Risk Index
has remained flat over the past year."