The Comptroller of the Currency warned in a speech delivered yesterday that the pace of auto lending reminds him of the mortgage industry in the run up to the 2009 financial crisis.
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.
According to TransUnion, the auto loan delinquency rate increased to 1.04 percent in the third quarter. However, the delinquency rate is still well below the third quarter average observed between 2007 and 2013.
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.
Delinquencies in the fourth quarter 2012 experience their first year-over-year increase since 2009, but they still remain below precession levels, Experian Automotive reports.
The credit reporting agency attributes the rise in the auto loan 60-day delinquency rate to seasonal patterns, says the rate is still down 56 percent from a recession high of 0.86 percent.
Auto loans made to below-prime car buyers grew 13.6 percent in the third quarter, Experian Automotive reported today. Leasing also grew, which the firm says is another sign of a recovering auto finance market.
Below-prime financing surpassed pre-recession levels in the second quarter. But is this trend dangerous for the future health of auto finance?
Consumers continued to make their auto loan payments on time in the second quarter, with 30- and 60-day delinquencies falling to historic lows.
The national auto loan delinquency rate reached its lowest level since TransUnion began tracking the data in 1999, the company reported this week.
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