The pace of auto financing is not slowing down.
Newly-issued auto loans year-to-date as of May 2013 total more than $196 billion — and that’s more than 50 percent of all new non-mortgage consumer credit originated in 2013, according to Equifax.
Moreover, new credit for financing vehicles January-May 2013 is at an eight-year high.
Originations in May are up more than 15 percent from the same time a year ago.
Meanwhile, the total number of new loans in that same time period of January-May 2013 is 9.9 million, also an eight-year high, and a year-over-year increase of nearly 12 percent.
“Demand for new and used cars is accelerating with improvements in the economy and the auto credit industry is supporting that rise in demand,” said Equifax Chief Economist Amy Crews Cutts.
The financial crisis and tighter lending standards led many drivers to delay the purchase of a new or quality used car or light truck, Cutts said.
Consumers are now finally looking to replace these old cars.
“Lending standards are also relaxing a bit, allowing more otherwise well-qualified subprime-credit buyers to obtain a new set of wheels,” Cutts said.
Other highlights from the most recent data:
- Balances on outstanding auto loans in July 2013 total $826 billion, the highest level in five years and an increase of nearly 10.9% from same time a year ago;
- Similarly, the total number of existing auto loans stands at 61 million, a 54-month high;
- By source, loans funded by banks, savings and loans, or credit unions are at $397.1 billion, while the total number of loans is 29.3 million — a five-year high for both;
- The total outstanding balance for loans funded by auto finance companies is $429.7 billion, a 50-month high, while the total number of existing loans is more than 31 million, its highest level in 46 months;
- Serious delinquencies on auto loans funded by finance companies in July 2013 represent 1.84% of outstanding balances, a year-over-year increase of more than 14%; and
- Serious delinquencies on auto loans funded by banks and other depositories are 0.34% of outstanding balances in July 2013, 5.8% lower than the same time a year ago.