The number of auto loan and lease accounts, and the origination balance, dipped in 2017, driven in part by consumers' shift toward used-vehicle sales, according to Equifax.
Consumers seeking smaller monthly payments are straying from new vehicles, and the glut of off-lease vehicles returning to market is providing more variety than ever, Gunnar Blix, deputy chief economist for Equifax, told Automotive News.
"There's a lot of opportunities for consumers to go out and look at the used cars more closely," Blix said. "There are some attractive deals. A car that's three years old still has a lot of the features that consumers are looking for."
In 2017, auto loan and lease origination balance dipped 1.1 percent from the year earlier to $611.3 billion. Last year, 28.1 million auto loan and lease accounts were opened, a 3.5 percent decrease from 2016, according Equifax's report on U.S. national consumer credit trends.
The number of cars sold in 2017 was higher than in 2016, with new-vehicle sales declining less than used-vehicle sales gained, Blix said. The "only reasonable explanation" for the 3.5 percent decrease in loans and lease accounts, Blix said, is that more cars were purchased without financing.
The shift affected leases more than loans. The number of lease accounts fell 5.6 percent, while the number of loan accounts dipped 3.1 percent.
"Leases are more commonly used to finance new cars, hence they were hit harder," Blix said. "However, at the same time, amounts financed went up, so the declines in terms of balances were smaller."
Overall, the market is healthy, Blix said. Last year marked the third highest on record for auto accounts, and second highest for loan and lease origination balance. In 2016, auto accounts and originations reached record highs, with an origination balance of $617.8 billion and 29.1 million auto accounts opened.