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Auto Finance ‘Running on All Cylinders,' Equifax Reports

Equifax reported today that auto finance’s total outstanding balance reached a record high in the opening quarter. New credit reached an eight-year high, while serious delinquencies fell to their lowest level in more than five years.

by Staff
June 3, 2014
3 min to read


ATLANTA  — The auto finance industry continued lead the credit industry’s recovery in the opening months of 2014, according to Equifax’s latest National Consumer Credit Trends Report. It showed that the segment’s total outstanding balance reached a record high $884 billion in April — a 10.8% increase from a year ago.

New credit on a year-to-date basis in February, according to the report, increased more than 13% from a year ago to $69.9 billion, an eight-year high. Additionally, serious delinquencies represented less than 1% of total outstanding balances — the lowest level in more than five years.

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“Auto lending continues to lead the recovery,” said Amy Crews Cutts, Equifax’s chief economist. “"By any metric you consider, whether new originations, total balances, or low delinquency levels, the auto sector is running on all cylinders.

“The boom in auto purchases ended in 2004, and people are now thinking about replacing their jalopies as the average age of a car on the road today is over 11.4 years old and the financing terms are favorable for those with decent credit histories," she added.

Other highlights from the most recent Equifax data include:

First Mortgage:

  • Though down from the previous month, the total balance of first mortgages outstanding in April showed an increase of 2.7% from same time a year ago.

  • Delinquent first mortgages, loans more than 30 days past due, represented less than 4.94% of outstanding balances, a decrease of more than 24% from same time a year ago.

  • Similarly, the total balance of first mortgages 90 days past due or in foreclosure was less than $240 billion, a six-year low and a decrease of more than 30% from same time a year ago.

  • Delinquencies on first mortgages originated in 2010 and later represented 10% of total delinquencies.

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Home Equity Revolving:

  • The total limit of new credit year to date in February was $14.4 billion, a five-year high and an increase of 15.8% from same time a year ago.

  • More than 140,000 new loans were originated year to date in February, a five-year high and a year-over-year increase of 8%.

  • The total balance of severely delinquent home equity revolving loans in April 2014 was less than $8 billion, a five-year low and a decrease of 12% from same time a year ago.

  • The total balance outstanding on home equity revolving loans continued to decline, falling 6.1% in April from the same time last year and shedding 29% relative to the May 2009 peak.

Home Equity Installment:

  • The total balance of home equity installment loans fell 13.3% from same time a year ago and is down 58% from the September 2007 high.

  • The total number of home equity installment loans outstanding fell 11% from April 2013.

  • The total balance of home equity installment loans in foreclosure was $400 million.

  • The total balance of severely delinquent home equity installment loans (90 days past due or in foreclosure) was slightly more than $3 billion, a five-year low and a decrease of nearly 35% from same time a year ago.

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