ATLANTA -

The availability of financing coupled with family budget influencers such as softening gas prices prompted Manheim chief economist Tom Webb to say the following about the auto finance landscape — especially in relation to the subprime segment: “It doesn’t get any better than it is right now.”

Webb made that assessment because delinquency rates haven’t soared in recent quarters, and the price at the pump is at or below $2 a gallon in many portions of the U.S.

“Skeptics speak of loose standards, but you can’t criticize underwriting if the borrower makes the payment,” Webb said during his quarterly conference call last week. “And borrowers are making their payments.”

Webb pointed out data from the Oil Price Information Service shows that gas prices haven’t been this low and trending down since the recession sent the economy into a tailspin in the closing months of 2008. But now more than six years later, the situation is considerably different, especially for consumers who fall into the subprime credit tier.

“Those are people, by definition, living on the edge,” Webb said. “To the extent you have an increase in gasoline prices, it puts them in arrears. This has been a windfall for them. I think it’s one of the reasons for the help in loan delinquency rates, which in turn creates more availability of credit.”

Still, Webb is sensing that finance companies are making some moves to curb risk in light of wholesale vehicle pricing potentially softening as more off-lease volume begins to fill the lanes.

“There is some indication and as most people would anticipate, that a lot of these lenders would probably start to look for more up-front money in terms of getting approvals the way they want them simply because expectations are that values will decline,” Webb said.

“I think there will be more pressure to get more upfront money in the deal, but good dealers should be able to do that,” he continued.

Besides looking to increase down payments, Webb noted another element that’s leaving industry at a juncture where it potentially can’t get any better.

“If you look at some of the securitization deals, they actually became less favorable for the lenders, which is indicating that the market is doing some of its own self-correction,” he said.

Finally, Webb touched on one segment of the financing world — the upcoming swell of income tax refund money into consumers’ accounts. He acknowledged many dealers already have leveraged tax season through programs offered by service providers such as TaxMax, which calculate the anticipated refund and structure contracts so dealers can turn vehicles in the fourth quarter.

“I have not really found anyone who has been a great source in terms of actually predicting whether tax flows will be heavy or light,” Webb said. “Certainly we know some of the complications that come when know that tax season will be delayed. Technically, this year it is not going to be delayed in terms of filing. However, there are anticipations that there might be some hiccups.”

And could that hiccup be, especially for dealers and finance companies that work with subprime consumers?

“You’re not interested in total income tax flows. You’re interested in the earned income tax credit,” Webb said. “The majority of those people file a Form 1040-EZ, which they can’t this year if they received subsidies under the Affordable Care Act. Supposedly there is supposed to be a reconciliation between their subsidies received and their tax refund, which you would assume would slow the process.

“And of course the IRS has indicated because of their stingy budget, they can’t handle overtime, etc.” Webb added with a chuckle. “So there are indications the flow of money may be a little bit slow and a little bit lower.

“Anyone who has to reconcile because of the subsidy, they’re going to have a lower refund. It can’t go higher,” he went on to say.