Experian: Auto Loan Balances Grow at Fastest Rate Since 2006
The total dollar volume for outstanding automotive loan balances grew by $92 million from the second quarter of 2014 to the second quarter of 2015, the largest dollar volume growth since 2006, according to a report from Experian Automotive.
SCHAUMBURG, Ill. — The total dollar volume for outstanding automotive loan balances grew by $92 million from the second quarter of 2014 to the second quarter of 2015, according to Experian Automotive’s latest State of the Automotive Finance Market report. It was the largest dollar volume growth since 2006.
Findings from the report showed that total loan balances also reached a record-high $932 billion in the second quarter of 2015, up from $840 billion in the second quarter of 2014.
In addition to rapid growth and record-setting dollar volumes, the automotive loan market showed increased stability, as consumers continued to make timely payments. In the second quarter of 2015, the 30-day delinquency rate dropped to the lowest level for a second quarter period in the past five years at 2.32%, down from 2.37% in the second quarter of 2014. The 60-day delinquency rate was up, but only slightly, from 0.603% in the second quarter of 2014 to 0.607% in the second quarter of 2015.
“The automotive loan market is working the way it’s supposed to, with loans being made, vehicles purchased and payments made on time,” said Melinda Zabritski, Experian’s senior director of automotive finance. “The automotive loan market is gaining momentum while maintaining remarkable stability. It’s a good sign for the economy overall.”
Lenders maintained a balanced strategy in the second quarter of 2015. Subprime loans and deep-subprime loans grew as a share of the market but were balanced out by growth of the super-prime risk tier. The combined 20.02% share for subprime and deep subprime was up slightly from 19.92% in the second quarter of 2015. Super prime grew from 20.68% share in the second quarter of 2014 to 20.99% share in the second quarter of 2015.
“Overall, lenders are taking a balanced approach to their portfolios, with slight growth in subprime and deep subprime balanced by the uptick in loans to the super-prime risk tier,” Zabritski continued. “There really is nothing alarming about the growth seen in subprime loans, provided consumers continue to make timely payments.”
On a state-by-state level, the highest delinquency rates were found primarily in the South, while the states with the lowest rates typically were found in the Midwest and the Northwest.
More Auto Finance
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 →
Trade-Ins in Negative Equity Reach New Heights
As such trade-ins rise in frequency, so do monthly loan payment amounts and interest rates, according to second-quarter data compiled by Edmunds.
Read More →
Auto Credit Plentiful
June numbers show lenders are readily granting access, including to risky borrowers, as consumers leverage themselves to take on high prices.
Read More →
Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →
Porsche Financial Services Shifts Structure
After 36 years with Porsche, the Financial Services Chief Financial Officer Konrad Riedl is retiring, and the department is realigning its management structure.
Read More →