Total outstanding U.S. auto loans hit an all-time high of $902.2 billion this spring, an increase of more than 10 percent from the same time a year earlier, according to the latest Equifax National Consumer Credit Trends Report, which was released July 24.
“Lenders are responding to record low delinquencies by offering great rates and terms, while consumers are responding to the improving economic conditions by making the decision to purchase newer vehicles,” Dennis Carlson, deputy chief economist at Equifax, said in a statement.
The Equifax report was based on year-to-date figures through April 2014. Carlson said the report showed total U.S. outstanding auto loans passed $900 billion for first time. The figures include leases.
Despite the increase in volume, the credit bureau said “serious” delinquencies of 60-plus days remained near all-time lows, and represented less than 1 percent of total outstanding balances.
Originations year to date through April were also the highest since 2005, at $163.5 billion, Equifax said.
The credit bureau also noted originations and total outstanding balances for subprime auto loans -- defined as loans to customers with credit scores of 640 or below -- also hit recent highs.
Equifax said subprime originations were 2.6 million units year to date through April, representing 32 percent of all auto loan originations. The total outstanding balance of subprime auto loans was $46.2 billion -- the highest in eight years, the credit bureau said.
Carlson said the increase in subprime lending was good for the economy. He said, “This is good news as a fully functioning second-chance market is essential for a healthy economy.”