Auto Loans and Leases Up 1% in Q3
The Federal Reserve reports U.S. car buyers borrowed $159 billion in the third quarter, a modest gain powered by a 6% increase in originations to prime credit customers.
The Federal Reserve Bank of New York reports auto loan originations grew in Q3 despite a 7.4% decrease in loans to subprime borrowers.
Photo by Thomas B. via Pixabay
NEW YORK — Auto loan originations grew by about 1% year-over-year in the third quarter, according to the Federal Reserve Bank of New York’s Center for Microeconomic Data’s latest Quarterly Report on Household Debt and Credit.
Auto loan originations totaled $159 billion, a small increase from the prior quarter. The median credit score for new auto loan originations increased to 711, an 8-point jump from Q2.
Originations for car buyers with sub-620 credit scores decreased by 7.4%, a loss that was at least partially offset by a 6% gain in the 720-plus range.
Mortgage originations, which include mortgage refinances, stood at $528 billion this quarter compared to $445 billion in Q3 2018, an 18.7% increase. The median credit score of mortgage borrowers rose to 765, a 6-point quarter-to-quarter increase.
“New credit extensions were strong in the third quarter of 2019, with auto loan originations reaching near-record highs and mortgage originations increasing significantly year-over-year,” said Donghoon Lee, research officer at the New York Fed. “The data suggest that households are taking advantage of a low interest rate environment to secure credit.”
More Auto Finance
Interest Rates Further Squeeze Auto Consumers
Last month’s hike and a potential second increase this month add to a growing list of inflation woes that could continue to dent overall car sales.
Read More →
Mind Your Process
Consistent steps taken in various aspects of the F&I office can make valuable differences over time, similar to an outline for a best-selling book.
Read More →
Top Five Credit Application Fraud Flags
Compliance audits regularly reveal bad habits that can lead to fraud charges and should have been stamped out decades ago.
Read More →
More Auto Loans for the Taking in August
Riskier categories were on the uptick for the month as lenders loosened access in several areas while balancing out the exposure in another, Cox Automotive reported.
Read More →
July Was Hot for Auto Borrowers
Credit proved readily available for many, but most loans left buyers in negative territory, Cox Automotive said.
Read More →
Dealer Lender Preferences Revealed
When lenders provide consistent, fast service, their overall satisfaction scores with dealers greatly improve, according to JD Power research.
Read More →
Auto Refi Savings Surge
Consumers with 84-month auto loan terms who refinanced saved the most on monthly payments, according to a new report by auto refinancing provider Caribou.
Read More →
Subaru Enters Lending Business
The automaker follows other brands in adding captive financing in the U.S., and says the move will strengthen its position here.
Read More →
Positive Equity Reaches Record High
Mainstream vehicle owners who bought a car seven years ago are likely to have positive equity when trading in for a new vehicle, according to second-quarter Edmunds data.
Read More →
Dealerships Are Paying the Price for Extended Car Loans
Growing negative-equity scenarios mean such lengthy terms should be addressed in a forward-looking way to make them work for the dealer and the consumer down the road.
Read More →