The combined outstanding balance for auto loans and leases jumped 12 percent in the first quarter, bolstered by a 28 percent surge in leasing, according to part one of Experian’s latest State of the Automotive Finance Market report.
Lease balances hit $76.9 billion in the first quarter. Lease balances also grew in the first quarter of 2015, to $60 billion, but only at a third of this year’s rate.
Loan balances in the first quarter of 2016 jumped 11 percent to $1.005 trillion. It also rose 11 percent in the first quarter of 2015, when it reached $905 billion.
“Automotive financing certainly has started off the year with a bang, seeing steady growth in balances and loan volumes throughout the first quarter,” Melinda Zabritski, senior director of automotive finance for Experian, said in a statement.
Open subprime loan and lease volume jumped 10.9 percent, making up 19 percent of the market share. Open nonprime volume climbed 9.5 percent, accounting for 18 percent of share. The prime credit segment grew 8.9 percent to make up 63percent of the market.
Delinquencies inch up
Thirty and sixty-day delinquency rates ticked up slightly.
Thirty-day delinquencies reached 2.1 percent, up from 2 percent in the first quarter of 2015.
Sixty day delinquencies rose to 0.61 percent, from 0.57 percent in the 2015 quarter.
“With more and more consumers relying on financing, it is important for lenders to keep a close eye on delinquency trends to ensure the market remains healthy,” Zabritski said in the statement. “Likewise, consumers need to continue making their monthly payments on time to keep affordable financing options open and available.”