The automotive industry has always been a key indicator of economic health in the United States. It is for this reason that we pay close attention to the automotive financing sector and how consumers and banks perform.
So far this year, it looks as if the volume in dollars of loans and balances owed are high, indicating lots of activity in the financing of automobiles. As you will see below, we are going to be keeping an eye on the number of delinquencies and statistics associated with independent banks in the upcoming months:
Today – Automotive Financing Remains Strong
Experian Automotive numbers from the first quarter show automotive financing remains strong. And here are some encouraging numbers despite some warning signs such as delinquencies:
- Total dollar volume for all outstanding auto loans was $811.3 billion for the quarter. (This is the highest since 2006, and is an increase of 12% from the first quarter of 2013).
- Independent finance companies showed the biggest percent increase in outstanding balances, up 19% to $118 billion.
- 30-day auto delinquencies fell to 2.24% of outstanding loans in the first quarter of 2014, down from 2.36% a year ago.
However, 22 states showed increases in 60 day delinquencies. Overall, 60-day delinquencies were essentially flat with the first quarter of last year. 60-day delinquencies represented 0.63% of the total, down from 0.65% in the 2013 period. As well, there was a slight increase during the first quarter in the industry average repossession rate, to 0.68% from 0.5% in the 2013 period. Independent finance companies, which cater to customers with subprime credit showed gains as well, triggering some concern. However, lending at this time has not tightened.
Stay tuned for more from NARFA, or contact us today. We'll be keeping an eye on these indicators as we move into the summer months. Data from Automotive News was used in this story.