Car Loans Now Top $1 Trillion as Delinquency Rates Rise
Car Loans Now top $1 Trillion as Delinquency Rates Rise
DETROIT — Americans are borrowing more than ever for new and used vehicles, and 30- and 60-day delinquency rates rose in the second quarter, according to the automotive arm of one of the nation’s largest credit bureaus.
The total balance of all outstanding auto loans reached $1.027 trillion between April 1 and June 30, the second consecutive quarter that it surpassed the $1-trillion mark, reports Experian Automotive.
More consumers also are turning to leases, which accounted for 31.44% of all new car and truck transactions in the second quarter, up from 26.9% a year earlier.
Both 30- and 60-day loan delinquencies rose, but the combined subprime and deep-subprime share of new and used auto loans and leases dropped from 23.3% in the second quarter of 2015 to 22.8% in second quarter of 2016.
“Yes, subprime and deep-subprime loans are growing, but the entire market is growing from a volume perspective across all risk tiers,” said Melinda Zabritski, Experian senior director of automotive finance. “In fact, the subprime loans have actually dropped as a percentage of the total market. That, combined with only a slight uptick in delinquencies, makes clear that the sky is not falling.”