Auto Loans Hit an All-Time High
According to the Equifax National Consumer Credit Trends Report, outstanding U.S. auto loans have reached $902.2 billion, thanks to record low delinquencies. This marks more than a 10 percent increase from the same time last year. Dennis Carlson, deputy chief economist at Equifax said in a recent statement, "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 decisions to purchase newer vehicles." Delinquencies now represent less than 1 percent of total outstanding balance for the third consecutive month. Outstanding auto loans have increased to more than 64 million, and new credit year-to-date auto loans through April have reached $163.5 billion, the highest it's been since 2005. However, the credit bureau also pointed out that originations and total outstanding balances for subprime auto loans, or loans for customers with a credit score of 640 or below, have also hit recent highs. Carlson also went on to add that the increase in these subprime auto loans was a good thing for our economy. "This is good news as a fully functioning second-chance market is essential for a healthy economy." Source: Equifax, Automotive News (Subscription Required)
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