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BANDON, Ore. — In what CNW Research called "another sign of
financial institutions slowly cranking open the lending spigot," the firm's latest
loan-to-value ratio data showed across the board improvement for the first half
of the year, especially for subprime borrowers.

CNW discovered the LTV ratio for subprime customers climbed
to 72.9 percent through the first half of 2012, marking a sharp rise from last
year's level of 66.2 percent.

Back in 2010, the subprime LTV ratio sunk to 60.1 percent,
by far the lowest point in CNW's data that stretches back to 2005. For
reference, that LTV ratio for subprime borrowers that year was 98.3 percent, a
reading more than 13 percent higher than the current ratio connected with prime
customers.

Firm president Art Spinella explained banks are chasing
after auto loans because of low repossession rates and a minimum of late payers.

"In the heyday of subprime lending, those with the lowest
acceptable FICO score had LTV ratios in the near-100 percent range. As the
recession deepened, banks were requiring larger down payments across the board,"
Spinella noted.

"Even prime borrowers saw banks expecting upwards of 20
percent down for an auto loan while subprime borrowers had to shell out as much
as 40 percent," he added.

While LTV ratios have increased but not quite to the
pre-recession level, Spinella emphasized the trend is more important than the
actual numbers.

"The auto industry, to reach any historically reasonable
sales levels, must have customers from all but the lowest FICO pools," Spinella
insisted.

"Vehicles continue to improve, and consumers have more
products to chose from," he continued. "When combining those two factors, it is
no wonder Americans feel they can postpone a new-vehicle purchase."

As the pent-up demand numbers indicate, CNW pointed out the
recession-induced delays in would-be buyers are shrinking.

In July for example, the firm determined the pool of people
in the pent-up demand category was nearly half of the number in the same month
a year ago.

"That translates into fewer people who will enter the
shopping funnel. And that translates into more marketing dollars needing to be
spent to put those not actively looking to buy a vehicle into the shopping 'spirit,'" Spinella declared.

"That's both expensive in terms of ad and incentive dollars
and risky because it relies even more on sub-prime consumers," he continued.

And CNW found subprime loan approvals are already gaining
significant steam. Approvals for this credit category are up 48 percent
year-over-year.