SCHAUMBURG, Ill.—U.S. outstanding automotive loan balances in the third quarter hit a new high mark—$968 billion—growing by more than 53% since 2010.
According to Experian’s latest State of the Automotive Finance Market report, the jump also marks a $98-billion increase from the previous year.
“Continued growth in the automotive finance market is a clear sign of improved consumer confidence over the past few years,” said Melinda Zabritski, Experian’s senior director of automotive finance. “Since bottoming out in the recession, automotive sales have rebounded steadily, which is a good sign for consumers, automotive manufacturers, lending organizations and the overall economy. What’s critical to this success is that consumers stay on top of their payments. If they can continue to manage their financial obligations and make timely payments, the automotive industry can continue to flourish and grow for quite some time.”
While the total amount of outstanding automotive loans has grown substantially, consumers have done their part to stabilize the finance market, Experian explained. During the third quarter of 2015, 30-day delinquencies dropped to 2.5% from 2.7% a year earlier. Furthermore, 60-day delinquencies also declined slightly (from 0.74% in Q3 2014 to 0.73% in Q3 2015) over the same time period.
The report also found that the largest increase in volume of open loans was in the super-prime category, rising 8.3% from the previous year. Subprime and nonprime followed closely, with increases of 7.8% and 7.7%, respectively.
“Furthermore, the distribution of open loans by risk segment remains relatively unchanged, demonstrating that the surge in outstanding automotive financing is driven by consumers across the board, not a specific segment of the market,” Experian stated.