Auto lending is up and delinquencies are down, according data cruncher Equifax.
The firm’s latest credit-trend report says the total balance of auto financing mid-way through 2014 is $902.2 billion, a record high.
It’s an increase of more than 10% from same time a year ago. The total number of auto loans still on the books is more than 64 million.
“Auto lending continues to thrive, accounting for more than 50% of all new non-mortgage lending through April of 2014,” says Equifax economist Dennis Carlson.
Despite record high balances, serious delinquencies remain near all-time lows. They represent less than 1% of total outstanding balances for the third consecutive month.
The total balance this year for new auto loans through April is $163.5 billion, the highest since at least 2005. The total number of new loans in that period is 8.1 million, an 8-year high.
“Lenders are responding to record low delinquencies by offering great rates and terms, while consumers are responding to the improving economic conditions by making the decision to purchase newer vehicles,” Carlson says.
Subprime lending has grown across all sectors in 2014, he says. “This is good news as a fully functioning second-chance market is essential for a healthy economy.”
About 2.6 million of loans through April went to subprime borrowers, consumers with risk scores of 640 or lower. They represent 32% of all auto loans originated today.
The total balance of subprime auto loans is $46.2 billion, an 8-year high and representing 28.2% of the total balance of new auto loans.