Subprime Up 13% as Total Auto Originations Decline
The Federal Reserve Bank of New York’s Q1 U.S. household debt report finds auto loan and lease originations declined slightly year-over-year — except for sub-620 customers — while 90-day delinquencies grew by 9.2%.
The Fed’s latest Household Debt and Credit Report finds subprime auto loan and lease originations and 90-day delinquencies are on the rise.
Illustration by jamesbhl via Pixabay
NEW YORK — The Federal Reserve Bank of New York’s latest Household Debt and Credit Report finds new auto loan originations declined to $139 billion in the first quarter, a “modest” year-over-year decline. But originations for car buyers and lessees with sub-620 credit scores grew 13% to $27.9 billion, accounting for 21.8% of total outstanding auto balances.
Perhaps more concerning are 90-day delinquencies, which grew 9.2% year-over-year to account for 4.69% of all auto debt, the highest rate since 2011.
Originations for fair (620–659) credit borrowers accounted for $17 billion worth of originations for 13.3% of all balances. The biggest share belongs to prime (760-plus) customers, who borrowed $45.9 billion to claim 35.9% of the market.
Total U.S. household debt, which includes auto, home, and student loans, home equity lines of credit and credit-card balances, grew 0.9% to $13.67 trillion, meaning auto loans accounted for 9.4% of all debt in the first quarter. Mortgage balances grew by $120 billion and student loans grew by $29 billion year-over-year, but credit-card balances and home equity lines of credit fell by $22 billion and $6 billion, respectively.
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