Auto Loan Balances Near $1 Trillion, Equifax Reports
The total balance of auto loans in December 2014 was $975 billion, representing 33.2% of total outstanding non-mortgage consumer debt, according to Equifax.
SAN FRANCISCO — The total balance of auto loans in December 2014 was $975 billion, representing 33.2% of total outstanding non-mortgage consumer debt, according to the latest Equifax Inc. National Consumer Credit Trends Report.
The total is an all-time high and an increase of 9.3% from same time a year ago. In addition, the total number of auto loans outstanding is nearly 71 million, a 6.5% increase from December 2013, according to the report, which was released today at the AFSA Vehicle Finance Conference and Exposition.
“The automobile industry had a strong year in 2014, selling more than 16.4 million new cars,” said Dennis Carlson, deputy chief economist at Equifax. “Auto lending is at a record high of more than $975 billon, accounting for nearly one third of all non-mortgage consumer debt. Further, while write-offs have increased slightly from last year, delinquency rates remain near record lows.
“Consumers are excited about both the quality and craftsmanship of the vehicles available today as well as the great financing available. The improving economic situation has finally afforded consumers the opportunity to rekindle their love affair with the automobile.”
The total number of new loans originated year-to-date in October was 21.2 million, an eight-year high, while the total balance of new auto loans is $434.1 billion, an increase of 7.1% from same time a year ago. The total number of new loans originated year-to-date in October for nonprime borrowers was 6.5 million, representing just under 31% of all auto loans originated today.
Similarly, the total balance of newly originated nonprime auto loans in that same time was $119.0 billion, an eight-year high and representing 27.4% of the total balance of new auto loans. In December, serious delinquencies on auto loans represent 1.10% of total outstanding balances, a slight increase over the previous month, but a decrease of 6% from December of 2013. Additionally, annualized write-offs represent 2.64% of total outstanding balances, a 5.3% increase over December of 2013.
“2015 is going to be an even more revved up year for the industry and for Automotive Services at Equifax, as we enter the New Year with a market full of eager-to-buy consumers and lenders who are armed with a more complete view of consumers’ financials than ever before,” Carlson added. “We’re excited to have our team of auto experts at the National Automotive Dealers Association (NADA) convention this week to discuss our latest solutions for the industry, and look forward to taking the successes we saw in 2014 to new heights this year.”
Originally posted on F&I and Showroom
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