| Summary: | 碩士 === 國立臺灣大學 === 經濟學研究所 === 107 === A decade after the U.S. subprime crisis in 2007-08, much ink has been spilled on the risks of U.S. subprime lending again. However, the subjects has been switched from house to automobile. In 2016, the subprime auto loans has reached US260 billions, surpassing the level before the global financial crisis. While in Taiwan, the auto sales, as well as auto loan’s share in consumer finance, has been increased year by year since 2009. A vehicle, as opposed to a house, loses its value over time. Therefore, the purpose of this study was to discuss the risk management in financial institutions and to address its influence on expected income.
We collected 37,534 auto loans from a domestic financial institution as research
samples and employed Logistic regression model for testing the significance of variables.
From the empirical results, the loan characteristics with forecasting power include term, loan-to-value ratios, rate, educational level of borrowing applicants, seniority, income and guarantor.
The loan interest rate and the delinquency and default rates on auto financing loans are negatively correlated, distinct from that on new and used car loans. The difference may arise from the borrowing purpose, as most subprime borrowers tend to have financing needs rather than those who borrow to buy a car.
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