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Equifax: Auto loans continue rebound
ATLANTA (1/23/14)--Auto lending continues to bounce back in a big way, according to the latest Equifax National Consumer Credit Trends Report.
 
From January to October 2013, the total number of new auto loans originated was 20.2 million, totaling $405.2 billion and representing the highest origination total for that time in eight years, Equifax said.
 
"Auto delinquencies have declined to levels last seen in mid-2006, and the strength in the performance of loans booked in the last few years is helping to make credit more widely available to those with higher-risk credit profiles, namely subprime borrowers," said Equifax Chief Economist Amy Crews Cutts.
 
Additional metrics for new credit include:
  • Year-over-year, the total balance of new loans Jan. to Oct. 2013 increased 14.7%, while the total number of new loans rose 11.6%;
  • Subprime auto lending now accounts for 31% of all auto loans originated;
  • October 2013 auto loan amount totals also hit an eight-year high for the month at $39 billion; and
  • The total balance of new credit for auto loans Jan.-Oct. 2013 represents 49% of all new non-mortgage consumer credit.
  • Balances on outstanding auto loans ($859.6 billion) and the total number of existing loans (62.3 million) in December 2013 are the highest in more than five years;
  • Loans funded by credit unions, banks and savings and loans are at $417.2 billion, while the total number of loans is 30.9 million--a five year high for both;
  • Similarly, the total outstanding balance for loans funded by auto finance companies is $442.5 billion, a five-year high, while the total number of existing loans is more than 32 million, a 59-month high;
  • Serious delinquencies on auto loans funded by finance companies in December 2013 represent 1.88% of outstanding balances, a year-over-year decrease of 13.5%;
  • In that same time, serious delinquencies on auto loans funded by banks or other depositories are 0.41% of outstanding balances, identical to December 2012.
The recession appears to have changed the choices auto buyers make, Cutts said. "The choices consumers are making with the types of cars they are buying have changed in the aftermath of the Great Recession, with a heavy emphasis on value for the dollar," she said. Demand for new cars is rising, but the mix is now shifted towards economically and environmentally friendly features."
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