Auto loan delinquencies hit ten-year low as market soars
Posted on Wednesday, June 17, 2015 at 12:22:06 PM
Despite the fact that auto financing is surging right now, auto loan delinquencies have hit a ten-year low.
Research from Equifax shows that outstanding loans that are 60 or more days past due are at the lowest level seen since September 2005. The delinquency rate for auto loans and leases in April was 0.81 percent. This is despite the fact that 980,000 subprime auto loans have been originated in 2015, an 8.1 percent increase over 2014.
"There's been much concern about the growth of auto lending, particularly in the subprime space, over the past year, yet historically low delinquency rates reveal that the sector continues to perform well," Dennis Carlson, deputy chief economist at Equifax, explained in a press release.
In February 2015, the average subprime loan amount was $17,363, 4.4 percent more than February 2014. The average amount for all auto loans issued in February 2015 was $20,310, a 4.2 percent increase over the same month a year ago.
Lou Loquasto, auto finance leader at Equifax, noted that in the robust auto financing market, lenders are offering consumers loans built to fit their needs, and that they're able to pay them off consistently. This is setting the industry up for some robust growth.