Equifax: Auto Loan Balance Hits 5-Year High
The balance of auto loans in August increased 9.7 percent from last year, rising from $760.8 billion to $834.4 billion, according to Equifax’s National Consumer Credit Trends Report.
ATLANTA — The total outstanding balances on auto and credit card loans realized a year-over-year increase in August, according to Equifax's latest National Consumer Credit Trends Report.
The total balance of existing auto loans is at its highest level in more than five-years, increasing 9.7 percent from a year ago to $834.4 billion. Balances on bank-issued credit cards increased (0.2 percent to $537.8 billion) for the second consecutive month — the first time in five year. Equifax also reported that retail card balances notched 24 consecutive months of year-over-year growth, rising 7 percent in August to $55.9 billion.
In addition, auto and credit card portfolios are the only two major segments in which rising balances accompany improving delinquency rates. Year-over-year changes in the 60-day plus delinquency rates, as a percentage of total balances outstanding, include:
Auto: decreased more than 10 percent (from 1.28 percent to 1.14 percent);
Bank credit card: decreased more than 13 percent (from 2.10 percent to 1.81 percent); and
Retail credit card: decreased 0.9 percent (from 3.37 percent to 3.34 percent)
"Our data consistently indicates that the American consumer is being very disciplined in their use of credit. It's like they've gone on a debt-diet and they are really sticking to it, with modest increases in line with capacity to repay," said Equifax Chief Economist Amy Crews Cutts.
Excluding student loans, total consumer debt is down 15 percent from its peak, Cutts added. Delinquency rates outside of home and student loans have returned to pre-recession levels.
“Economic conditions are causing the lingering high default rates on student loans and mortgages, and hopefully we will see those improve more quickly in coming months," she said.
Other highlights for the auto segment include:
The total number of loans outstanding in August 2013 is more than 61 million, a 57-month high;
By source, loans funded by banks, savings and loans or credit unions are at $401.7 billion, while the total number of loans is 29.5 million — a five-year high for both;
The total outstanding balance for loans funded by auto finance companies is $432.7 billion, a 56-month high, while the total number of existing loans is more than 31.8 million, its highest level in 54-months; and
The total balance of auto loan originations year-to-date in June 2013 is 237.6 billion, an increase of nearly 15 percent from same time a year ago and the most new credit originated for that time period in more than eight years.
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