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Equifax More stability in auto loans credit cards
ATLANTA (10/1/12)--Auto lending balances and new accounts in the U.S. are increasing steadily, with the number of new accounts opened in the first half approaching pre-recession levels, according to credit bureau Equifax's latest monthly National Consumer Credit Trends Report.

Credit unions should take note of these lending opportunities.   

Auto lending is gaining strength, reflecting increasing demand for new cars, Equifax said. Year-to-date through June, total auto lending has reached $207 billion, a 13.7% increase over the volume during the same period in 2011.

"The average age of cars on the road today in the U.S. is the highest ever recorded, and consumers are ready to replace these older vehicles," said Equifax Chief Economist Amy Crews Cutts. "At the same time, the financial picture has improved sufficiently that we are seeing auto lending markets become facilitators rather than obstacles to meeting this demand, especially in the near-prime segment of the market that had all but ceased to exist during the worst of the financial crisis and recession," she added.

Sales of new cars and light trucks increased nearly 15% during the first half of the year, dominated by sales of smaller, more efficient and cheaper vehicles. During the first half of this year, auto lending at 10.7 million loans is the highest since 2007, when 11 million loans were opened.

Delinquency and write-off rates on auto loans and leases are well below levels at the start of the recession, Equifax said. Write-off rates in terms of dollars in August were one-third of what they were at the peak in March 2009 (2.1% versus 6.1%), while the percentage of auto account write-offs was about half of the peak volume (2.5% versus 5.2%). Write-off rates using both dollars and units exceeded 4% at the start of the recession.

Other credit highlights from the most recent data include:

Bank Credit Cards:

  • Nationally, bank credit card origination credit limits year-to-date through June increased more than 36% from their recession low, to $87.3 billion in 2012 from $55.5 billion in 2010.
  • The total number of bank credit card accounts exceeded 300 million for the first time since April 2010, a 28-month high.
  • While the amount of credit available--the difference between credit used and credit limits--has risen since February 2011, use rates continued to fall until May of this year, when they hit a fiv-year low of 22.1%.                                                                                                                    
  • Use rates rose to 22.4% and the amount of credit available was $1.87 trillion in August.
Retail Credit Cards:

  • Nationally, retail credit card origination credit limits year-to-date increased more than 15%, to $30.4 billion through June from $25.8 billion in 2010.
  • Retail credit card balances in August were more than $51 billion--a 33-month high.
  • Total retail credit card limits were at more than $340 billion through August--a 15% increase from May's $290 billion and the highest level in 27 months.
Student Loans:

  • New student loans increased more than 15%, to $30.3 billion year-to-date through June, from $25.6 billion in 2010.
  • Student loan balances increased throughout the recession and subsequent recovery, reaching more than $800 billion through August.
  • Student loan write-offs totaled $10.6 billion year-to-date through August, an increase of more than 10% from same time a year earlier--$9.5 billion in 2011.
  • The average amount of student loans was $9,467 in June--more than 67% greater than the recession low of $5,660 in 2008.
  • The average student loan size is increasing at a slower rate than overall student borrowing. The average single student loan in June was $5,701, compared with $4,126 in June 2008, with students seeking multiple loans to cover their education costs.


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