The auto finance market keeps on growing despite a few cautionary notes, first-quarter numbers from Experian Automotive show.
Total dollar volume for all outstanding auto loans was $811.3 billion for the quarter. That was the highest since Experian Automotive began reporting the numbers in 2006, and an increase of 12 percent from the first quarter of 2013.
Within the total, independent finance companies showed the biggest percent increase in outstanding balances, up 19 percent to $118 billion.
In addition, 30-day auto delinquencies fell slightly to 2.24 percent of outstanding loans in the first quarter of 2014, down from 2.36 percent a year ago.
A dim spot was a slight uptick in one measure for 60-day delinquencies, which are more likely to be written off as a loss. Twenty-two states showed increases, but that was from very low levels overall, according to Melinda Zabritski, senior director at Experian Automotive.
Overall, 60-day delinquencies were essentially flat with the first quarter of last year. In terms of accounts, 60-day delinquencies represented 0.63 percent of the total, down from 0.65 percent in the 2013 period. In terms of the percent of outstanding dollars, 60-day delinquencies were 0.48 percent in the first quarter of 2014, up from 0.45 percent a year ago.
Another first-quarter dim spot was a slight increase in the industry average repossession rate, to 0.68 percent from 0.5 percent in the 2013 period. However, the only major auto lending sector that was up was independent finance companies, which cater to customers with subprime credit. For that sector, the repo rate increased to 3.01 percent in the first quarter, from 1.78 percent in the 2013 period. Repos as a percent of total accounts in the first quarter were down for banks, captive finance companies and credit unions, Experian said.
Zabritski said a sustained rise in delinquencies could cause lenders to tighten lending standards, but that’s not the case today.
You can reach Jim Henry at firstname.lastname@example.org