The Greatest of Them All

There were 10.4 million new cars sold last year, and of that, 60% to 70% were financed. Around 40 million used vehicles are sold annually, and while a lower percentage are financed, there is still a healthy percentage that are acquired with a loan — say 40%. Therefore, we estimate that something like 23 million auto loans are made annually.

That number exceeds mortgage or student loans originated annually. Around 400,000 to 500,000 per year of new homes are sold annually (the March 2010 annualized rate was 410,000) and around 5 million (5.35 million in March) of existing homes are sold per annum. Not 100% are financed.

What about student loans? There were 15.9 million college students in the US at the end of last year. That’s a big number, especially considering that it does not include grad students. The Department of Education says something like 39% of undergraduates have “any student loans.” That is in the range of 6 million, and only a fourth of all college students get a new loan in a particular year. There are fewer students in graduate school than in college. That leads us to believe that the number of student loans originated annually falls below the number of auto loans made within a calendar year. Not an exact science, but we feel reasonably confident in our conclusion.

Just a couple of additional points. We are gauging this against other consumer credit products, not commercial loans. Finally, of course, in dollars there is a greater value of mortgages made annually, and because of the duration of mortgages, there are a greater number of mortgages outstanding than auto or student loans.