Auto loan demand has strengthened, according to a Federal Reserve survey released today.
“On the demand side … respondents experienced stronger demand for auto and credit card loans on balance,” according to the April 2015 Senior Loan Officer opinion survey.
Over 20% of total respondents — 14 banks — reported stronger auto loan demand. Some large banks experienced weaker auto loan demand, however, while the demand for other consumer loans was unchanged.
Out of 76 banks surveyed, only five banks — 7.6% of the total — indicated they have loosened the standards for approving loan applications. A similar percentage, 7.5% of respondents, saw a longer average loan term, while the rest recorded no change. Three banks reported that they lowered the minimum required credit score for getting an auto loan.
Four large banks reported a wider spread of loan rates over the bank’s cost of funds, while 12 banks experienced a narrower spread. Last year’s April survey looked similar, with a slight easing in the standards for approving applications for auto loans. The Senior Loan Officer Survey addresses the changes in standards of bank loans for the previous three months.
More details on the Auto Finance Risk & Compliance Summit, May 18-19 in San Diego, can be found at www.afrcs.com.
