Auto Loan Balances Hit All-Time High: Equifax
Midway through 2014, auto loan balances soared to $902.2 billion, setting a national record.
According to Equifax’s National Consumer Credit Trends Report, that figure is a record high with a total of more than 64 million auto loans outstanding as of April.
“Auto lending continues to thrive, accounting for more than fifty percent of all new non-mortgage lending through April of 2014,” said Dennis Carlson, deputy chief economist at Equifax.
Lenders are responding to record low delinquencies by offering great rates and terms, while consumers are responding to the improving economic conditions by making the decision to purchase newer vehicles, he added.
Despite record high balances, serious delinquencies on auto loans remain near all-time lows, representing less than 1% of total outstanding balances for the third consecutive month, according to Equifax.
In addition, the total balance of new credit originated for auto loans year-to-date in April was $163.5 billion, the highest since at least 2005.
The Equifax report also showed the total number of new loans originated year-to-date in April was 8.1 million, an eight-year high.
The total number of new loans originated in that same time for subprime borrowers, or consumers with risk scores of 640 or lower, was 2.6 million, representing 32% of all auto loans originated today.
Similarly, the total balance of subprime auto loans is $46.2 billion, an eight-year high and representing 28.2% of the total balance of new auto loans.