Outstanding auto loans and leases combined topped $1 trillion in the third quarter, an increase of 11.1% from a year ago, TransUnion reported today.
“The two big stories are the strength of originations and the growth in balances … at the same time we continue to see low, stable delinquencies across all risk tiers,” said Jason Laky, senior vice president and automotive business leader for TransUnion.
“Consumers also continue to prioritize their auto payments,” he told Auto Finance News today.
At $1.008 trillion, the end of the third quarter was the first time TransUnion’s numbers topped the $1 trillion mark, Laky said. Other data sources reported outstanding loans and leases passed $1 trillion at the end of the second quarter, including rival Equifax and the New York Federal Reserve.
In the third quarter, the subprime risk tier reached its highest share of total outstanding loans since the first quarter of 2011, at 15.3%. That was only a slight increase from 15.1% a year ago, TransUnion said. However, overall average delinquencies remain low, the credit bureau said. Chicago-based TransUnion defines subprime as credit scores below 600.
“As balances increase, auto loan delinquencies (the rate of borrowers 60 days or more delinquent on their auto loans) continue to remain flat – remaining at 1.16% in both Q3 2014 and Q3 2015,” TransUnion said today in a written report.
Laky said growth in auto loans and leases has been “controlled and deliberate.” An increase in the average amount outstanding per borrower is “no cause for concern,” since delinquencies remain steady, he said.
The average new auto loan debt per borrower increased to $17,942, from $17,090 a year ago, for the second quarter of 2015 versus the second quarter or 2014. That part of TransUnion’s detailed analysis lags one quarter, to make sure all loans are included, the credit bureau said.