Auto loan originations continue to lift the sector’s overall outstanding balances, according to the National Consumer Credit Trends Report from Equifax Inc.
Total auto loan outstanding balances stood at $884 billion in April 2014, a record high and a 10.8% increase from the same time last year. If the first two months of the year are any indication of what’s to come, that balance will be getting even bigger.
As of February 2014, the market had seen $69.6 billion in new originations, an eight-year high and an increase of 13% over the same two-month period last year.
Meanwhile, 60-day plus delinquencies represented less than 1% of total outstanding balances, the lowest figure in more than five years, according to Equifax.
Equifax chief economist Amy Crews Cutts said auto lending continues to lead the recovery. “By any metric you consider, whether new originations, total balances, or low delinquency levels, the auto sector is running on all cylinders,” she said in a company release.
She said that’s due to the car-buying boom that ended back in 2004.Now, people are thinking about replacing those cars and the financing terms are favorable for those with decent credit histories, she said.
