Last week, Experian PLC’s automotive information services reported that the delinquency is down for outstanding auto loans in the United States. As a result, the nation’s lenders, banks and finance companies are writing more auto loans then they have at any other time in the past.
Auto loans at record highs
According to Experian Automotive Services, the number of auto loans grew to $682 million in the year’s second quarter. That is a increase of 5.5 percent, year-over-year, from $646 billion. That is still 3 percent less than in 2007, before the financial crisis, despite the fact that more loans are being written.
More borrowers paying on time
The reason for the major increase in auto lending is a decrease in delinquencies, says Experian Automotive Services. More and more borrowers are making their loan payments in a timely manner than at any time since the Great Recession began. That is giving lenders more confidence in auto lending.
In the second quarter, just 2.52 percent of 30 days loans were delinquent. Last year, that number was 2.59 percent.
For 60 day loans, the delinquency rate was just 0.58 percent. A year earlier, that rate was 0.6 percent.
Those are record lows, says Experian.
In turn, the nation’s car dealers are moving more units out of their show rooms.
Good news for entire auto industry
Melinda Zabritski, director of automotive lending for Experian Automotive, said:
“Consumers continue to do an excellent job of paying back their vehicle loans in a timely fashion, and that’s good news for everyone in the industry… Since the automotive loan industry is highly interdependent between banks and retailers, this continued strong performance for loan portfolios is good for automotive retailers and consumers alike.”
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Experian also reported that the vehicle repossession rates also declined by 28 percent from the second quarter of 2011, to 0.43 percent.
Navy Federal Credit Union concurs
Meanwhile, those findings are also reflected in auto loan figures released this week by the Navy Federal Credit Union. It says its auto loans had grown by 36 percent, year-over-year, in June.
Auto loan growth at Navy Federal Credit Union was up 36% as of June, more than double the national average of 14%.
Formerly called CCN Systems, Experian collects financial information on individuals and businesses in 41 different countries. Its four principal areas of activity are in Credit Services, Decision Analytics, Marketing Services and Interactive. It is one of the three major credit reporting bureaus in the United States.