Equifax: Auto Loan Balances at Highest Levels Since 2009

Equifax: Auto Loan Balances at Highest Levels Since 2009U.S. auto loan balances totaled $782 billion by the end of January, the highest level in four years, while the number of existing loans stood at 59 million, also a four-year high, according to Equifax.
Equifax’s report includes loans for both auto purchases and leases.
Loans funded through financial institutions such as banks, savings and loans or credit unions, are at more than $372 billion, realizing a 60-month high and back to pre-recession levels. Similarly, at more than $409 billion, balances on loans funded by auto finance companies are at its highest level in 46 months.
Delinquency rates on auto loans are also improving. By the end of 2012, delinquencies decreased by nearly 11 precent from same time a year ago, while auto loan and lease losses in that same period dropped nearly 10 percent.
For January-November 2012, auto lending to subprime borrowers (origination risk scores less than 640) increased more than 18 percent year-over-year, from 5.1 million to 6.1 million.
“Sales of new cars and light trucks are rising steadily, though they are still well below pre-recession levels of roughly 17 million units,” said Equifax Chief Economist Amy Crews Cutts. “Yet auto lending, including leases, is now back to pre-recession levels, driven in part by the very attractive interest rates being offered on these loans and a gradual increase in willingness to lend to less-than-perfect credit borrowers.”
Equifax also found that auto loans originated January through November 2012 totaled $387.7 billion, a six-year high and representing nearly 46 percent of total consumer credit originated ($825 billion) for that same time.

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