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Experian: Total Outstanding Auto Loan Balance Hits All-Time High

February 19, 2015

SCHAUMBURG, Ill. —The total outstanding balance on open automotive loans continued to rise in the fourth quarter of 2014, reaching an all-time high of $886 billion, according to data from Experian Automotive.

According to Experian’s latest State of the Automotive Finance Market report, the volume of open loans increased across all risk tiers. However, despite the increases in volume, market share for subprime and deep subprime loans remained at relatively low levels, as much of the growth from a year ago was seen in the super-prime risk segment.

“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,” said Melinda Zabritski, Experian’s director of automotive finance. “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. With that said, keeping an eye on consumer payment behavior and the lending community’s appetite for risk is important because these types of insights help the industry make better decisions that may affect loan terms or interest rates in the future.”

While the volume of loans in the subprime and deep-subprime risk tiers were up from last year — 3.83% and 5.60%, respectively — the combined market share for the two was down slightly at 20.31%. On the other end of the spectrum, the volume of loans to super-prime consumers was up 7.90% from a year ago. It also was the only risk tier to see a year-over-year increase in market share.

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 1 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.

At a state level, the highest delinquency rates were found primarily in the South, while the states with the lowest rates were typically found in the Midwest and Northwest.

30-Day Delinquencies      
Highest   Lowest  
Mississippi 4.46% North Dakota 1.23%
Washington, D.C. 3.68% Alaska 1.47%
Louisiana 3.59% Minnesota 1.48%
South Carolina 3.52% Oregon 1.48%
Alabama 3.49% South Dakota 1.52%

60-Day Delinquencies      
Highest   Lowest  
Washington, D.C. 1.47% North Dakota 0.33%
Mississippi 1.27% Minnesota 0.39%
Louisiana 1.15% Oregon 0.39%
Alabama 1.03% Washington 0.40%
South Carolina 0.99% Alaska and New Hampshire 0.44%

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