Buoyed by a drop in delinquent loans, auto loan balances reached an all-time high in the third quarter at $782.9 billion, according to Experian Automotive.
That figure was up $103 billion from the third quarter in 2012, data from Experian’s latest State of the Automotive Finance Market report showed.
Indeed, automotive loan balances are growing across the country. Those showing the fastest percentage growth year over year included California (up 29.3%), Texas (up 26.3%) and Nevada (up 26.0%).
The states with the slowest growth rates year over year included Hawaii (up 12.4%), Wyoming (up 12.3%) and Michigan (up 6.8%).
“The availability of credit, combined with consumers’ continued strong performance repaying their loans, has a positive spiral effect,” said Melinda Zabritski, senior director of automotive lending for Experian Automotive. “It allows lenders to slowly but surely take on additional risk while providing more access to loans and paving the way for higher auto sales.”
Additional findings from the report showed 30-day automotive loan delinquencies were down 3.4% over last year, going from 2.67% in Q3 2012 to 2.58% in Q3 2013.
Experian Automotive said one lending drag spotted was the sharp increase in vehicle repossessions in the third quarter. In Q3 2012, the repossession rate was 0.40% but it jumped to 0.62% in Q3 2013 — a 54.4% increase.
The increase in repossessions was limited entirely to finance companies, which typically provide loans to the subprime market, according to Experience Automotive. Finance companies saw their repossession rate jump 124.9% going from 1.18% in Q3 2012 to 2.66% in Q3 2013.
Meanwhile, repossession rates for captive finance companies, banks and credit unions all dropped slightly in the quarter, the report noted.