Six years after the dark days of the Great Recession, automotive lending is back on the rise, while delinquencies on those loans remain grounded.
Ward’s Auto reports the total balance of the loans after the first half of 2014, according to a report by credit reporting agency Equifax, is a record $902.2 billion. Equifax economist Dennis Carlson adds that auto lending accounts for more than half of all new non-mortgage lending during the first four months of the year, with delinquencies making up less than 1 percent of the total balance:
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.
For those first months of 2014, the total balance of new auto loans is $163.5 billion, with 8.1 million loans out and about. Further, 2.6 million of those loans went to subprime consumers, while the total balance of the loans is $46.2 billion, making up 28.2 percent of the overall new loan balance.