Equifax recently announced the total auto loan balance as of December 2014, in which the credit bureau reported an all-time high auto loan balance of $975 billion, showing a 9.3 percent increase from the same time a year before. all in all, there are about 71 million outstanding auto loans — about 6.5 percent more compared with the December 2013 data.
In the year-to-date October 2014 record for new loans, about 21.2 million were recorded, the highest in eight years. And in that month alone, auto loan balance amounted to $434.1 billion or an equivalent increase of 7.1 percent from October 2013. In addition, the October 2014 balance for new auto loan report for nonprime borrowers (individuals with risk scores of up to 640) amounted to $434.1 billion. That’s an equivalent 7.1 percent increase from October 2013 data.
As for auto loan delinquencies as of December 2013, 1.1 percent of the total auto loans balance represent serious delinquencies or a 6 percent decrease from December 2013 data. However, there was an increase in annualized write-offs — about 5.3 percent more from December 2013 records.
So what does this mean to brand-new and used-car dealers? It seems consumers are willing to spend more on vehicles in the recent years. And that news could never be more welcoming given the fact that we’ve just emerged from the economic recession.