Remarkably stable auto loan balances reach $1 trillion
Posted on Friday, August 14, 2015 at 10:18:23 AM
In a climate of "remarkable stability," the auto financing debt surged to record levels after an impressive month of sales in July, as the sector's notable run continues.
A New York Federal Reserve report stated that auto loan debt rose $38 billion quarter-over-quarter to $1 trillion, the first time auto loan balances have reached this mark. And the people who are applying for auto financing are prepared to pay it off as well.
Though auto loan debt has climbed to an all-time high, delinquency rates among borrowers are at their lowest levels in years, the Wall Street Journal noted. Since 2013 the share of delinquent borrowers in the auto market has hovered just above 3 percent.
"The automotive loan market is working the way it's supposed to, with loans being made, vehicles purchased and payments made on time," Melinda Zabritski, Experian's senior director of automotive finance, explained in the company's "State of the Automotive Finance Market report.," according to auto finance news outlet SubPrime. "The automotive loan market is gaining momentum while maintaining remarkable stability. It's a good sign for the economy overall."
Low delinquency rates, balanced distribution of loans among credit tiers and impressive sales have all contributed to today's robust and stable auto lending market, the news source explained.