In 2014, U.S. consumers carried the largest amount of auto loan balances ever at $886 billion, according to consumer data firm Experian.
In its Automotive Finance Market report, the firm's automotive division, Experian Automotive, reported while auto loan balances increased in all risk tiers, the proportion of overall, cumulative, auto loan balances held by the lowest risk tiers remained flat or nearly flat.
The numbers of auto loans to subprime borrowers rose 3.84%, according to Experian. The number to deep subprime borrowers rose 5.60%. The combined market share for both categories dropped slightly to 20.31%.
Experian defined deep-subprime Vantage scores as those between 3.00 and 4.99. Subprime scores were between 5.00 and 6.00, according to a company spokesperson.
On the high end of the credit spectrum, the numbers of loans to borrowers with the highest credit scores rose by 7.90%.
Further findings from the report showed that 30- and 60-day automotive loan delinquencies remained flat during the quarter. Thirty-day delinquencies were up just one basis point from a year ago, going from 2.61% to 2.62%, while 60-day delinquencies dropped slightly, going from 0.73% to 0.72% over the same time period.
Borrowers primarily in the South had the highest delinquency rates while the Midwest and Northwest had the lowest, according to Experian.
“Whenever there is an uptick in the number of loans to subprime and deep-subprime customers, there is the potential for a 'sky is falling' type of reaction,” Melinda Zabritski, Experian's director of automotive finance, said. “The reality is we are looking at a remarkably stable automotive loan market, in part because consumers are continuing to stay on top of their payments.”
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