Auto Loan Balances Hit All-Time High: $782.9B in Third Quarter

Auto Loan Balances Hit All-Time High: $782.9B in Third QuarterAuto financing is moving at a record pace, with outstanding balances reaching $782.9 billion in the third quarter of 2013, up $103 billion from a year earlier.
Experian Automotive said that outstanding automotive loan balances hit a record high since it began to publicly report such data seven years ago.
Additional findings from the report showed 30-day automotive loan delinquencies were down 3.4 percent over last year, moving from 2.67 percent in the third quarter of 2012 to 2.58 percent in the third quarter of this year. Sixty-day delinquencies remained flat.
“The combination of higher loan balances and relatively flat loan delinquencies is good news for everyone connected to the automotive industry, including consumers, lenders, retailers and manufacturers,” said Melinda Zabritski, senior director of Automotive Lending for Experian Automotive.
Zabritski added that the availability of credit, combined with a strong performance by consumers in repaying their loans, allows lenders to “slowly but surely” take on additional risk while providing more access to loans.
Automotive loan balances are growing across the country.
Those showing the fastest percentage growth year over year included: California (up 29.3 percent), Texas (up 26.3 percent) and Nevada (up 26.0 percent). The states with the slowest growth rates year over year included Hawaii (up 12.4 percent), Wyoming (up 12.3 percent) and Michigan (up 6.8 percent).
States with the steepest decline in the loan balances included: Hawaii (down 12.75 percent), Vermont (down 11.69 percent) and Oregon (down 11.64 percent).
States with the biggest jump in 30-day automotive loan balance delinquencies year-over-year included Rhode Island (up 18.53 percent), Wyoming (up 11.98 percent) and Alaska (up 10.24 percent).
As the big negative in Experian’s report: third-quarter 2013 saw a sharp increase in vehicle repossessions for the quarter. A year ago, the repossession rate was 0.40 percent, but it jumped to 0.62 percent in third-quarter 2013 — a 54.4 percent increase.
However, the increase in repossessions was limited entirely to finance companies, which typically provide loans to the subprime market.
In other findings:

  • Outstanding loans in the nonprime, subprime and deep-subprime segments were up, but only slightly (36 percent in Q3 2013 from 35.9 percent in Q3 2012);
  • The percentage of loan dollars that are 30 days delinquent rose slightly (2.16 percent in Q3 2012 to 2.17 percent in Q3 2013);
  • The percentage of loan dollars that are 60 days delinquent rose slightly (0.50 percent in Q3 2012 to 0.52 percent in Q3 2013);
  • The average charge-off amount for loans gone bad jumped from $7,026 in Q3 2012 to $7,770 in Q3 2013

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