- Outstanding auto loan balances have reached a record high at $839.1 billion in the second quarter of 2014, according to Experian Automotive.
- The Experian State of the Automotive Finance Market report says that represents an 11.7 percent increase over last year.
- However, the report found that loan delinquency and vehicle repossession rates are also up compared to 2013.
SCHAUMBURG, Illinois — Outstanding auto loan balances have reached a record high at $839.1 billion, according to Experian Automotive's State of the Automotive Finance Market report for the second quarter of 2014.
Experian says that's an 11.7 percent increase over last year.
As previously reported by Edmunds, auto sales have been strong this year, and this is reflected in financing statistics.
When it comes to the total volume of loans being made, Experian found that all lender types experienced growth over 2013, with banks up by $31 billion, credit unions up by $25 billion, finance companies up by $24 billion and "captive" lenders (for example, manufacturer finance subsidiaries) up by $9 billion.
At the same time, however, the report notes that 60-day delinquencies, while still close to historic lows, have increased 7 percent in Q2 2014 and now make up 0.62 percent of the total outstanding loans. And 30-day delinquent loans have taken a slight 0.01 percent rise to account for 2.39 percent of the total.
The states with the highest delinquency rates were Mississippi (4.06 percent), the District of Columbia (3.58 percent) and South Carolina (3.28 percent). Those with the lowest rates were North Dakota (1.15 percent), South Dakota (1.24 percent) and Oregon (1.36 percent).
"The rosy glow of perfect payment performance in the automotive space is beginning to tarnish," said Melinda Zabritski, senior director of automotive finance for Experian Automotive, in a statement. "We're starting to see a slight uptick in the number of consumers struggling to make their automotive payments on time; however, we have to keep in mind that these percentages are still extremely low. We'll want to keep an eye on how consumers pay their bills in the coming months, as it may dictate the availability of credit in the future."
With loan delinquency up, it's not surprising that Experian found the rate of auto repossessions had also risen — by 70.2 percent in the second quarter, compared to last year. Interestingly, finance companies were the only lender type to see an increase. Banks were down by 1.6 percent, credit unions by 1.4 percent and captives by 9.1 percent.
Edmunds says: Rising numbers of auto loans is a sign of health in the industry, but Experian's findings about delinquency rates may be cause for concern.