ATLANTA — Slowing demand for new vehicles points to auto finance sources having to contend with increased compeittion for consumer loans. That was the conclusion of Equifax's Nation Consumer Credit Trends report for August, which showed that auto originations rose 3.5% from a year ago through the first six months of the year.

Balances on new loans also grew, rising 5.5% from a year ago, while the share of loans made to subprime borrowers (Equifax score of less than 620) fell 0.6% vs. the first six months of 2015.

“Lenders, in general, have been very risk averse since the Great Recession, with more and more using all the tools available to accurately rate and price the risks they are taking, and to sensibly decide which ones they don’t want to take,” said Amy Crews Cutts, chief economist at Equifax. “Lending in the subprime segment can be done well and to the mutual benefit of consumers and lenders, provided the whole credit-collateral-capacity picture of the loan is healthy. In recent months, there has been a shift in the share of new loans going to higher-credit quality borrowers, possibly indicating tightening of lending standards.”

Although the possible shift toward higher-credit quality borrowers and possible tightening of lending standards is reflected in the fewer amount of subprime borrowers through the first six months of the year, delinquency and write-off rates remain essentially the same. As of last month, the share of balances 60 days or more past due amounted to 1.05% of all balances, an increase of seven basis points compared to the year before. The reported write-off rate was 21.2 basis points, a 1.8 basis point increase compared to the same time last year.

“The market is starting to see slowing demand, which means lenders will have to contend with increased competition for consumer loans, which will drive a need for increased market intelligence to properly identify and mitigate risk in this environment,” said Lou Loquasto, vice president at Equifax.

Equifax also found that as of August 2016, auto loan portfolio balances have been growing at a higher rate year over year for banks. As of last month, banks have seen a 10.6% increase in auto loan portfolio balances. Comparatively, finance companies have seen a 6.8% increase to auto loan portfolios. Leasing on the other hand, the firm found, saw healthy growth for both banks and finance companies — 14.1% and 16.1% year-over-year increases, respectively.