Auto Loan Balances Hit All-Time High, Equifax Reports
The total balance of auto loans reached a record high in the first half of 2014, with auto loans accounting for more than 50% of all non-mortgage lending through April.
ATLANTA — During the first half of 2014, total balance of auto loans reached $902.2 billion, a record high and an increase of more than 10% from same time a year ago, according to Equifax’s latest National Consumer Credit Trends Report. Additionally, the total number of auto loans outstanding reached more than 64 million.
"Auto lending continues to thrive, accounting for more than 50% 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.
“Additionally, subprime lending has grown across all sectors in 2014. This is good news as a fully functioning second-chance market is essential for a healthy economy."
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. 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 total number of new loans originated year to date in April was 8.1 million, an eight-year high, according to the report. 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. Similarly, the total balance of subprime auto loans reached an eight-year high of $46.2 billion, representing 28.2% of the total balance of new auto loans.
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