Originated Auto Loans Up 47 Percent
Apply for a Loan
Secured with SHA-256 Encryption
UPDATED: Nov 30, 2011
Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.
Auto loans issued from auto financing companies has increased by more than 47 percent, according to an Equifax press release.
There were more than 854,800 loans originated by auto financing companies in July 2011. That is up by 273,500 loans when compared to July’s loans issued last year.
Auto financing companies also outpace the amount of loans originated by both banks and credit unions combined by over 20,000.
This increase in loans issued may not be a good thing though. An alarming 38.5 percent of those loans originated by these companies were issued to subprime borrowers—those with credit scores below 640. But, surprisingly, delinquency rates, defined by those who are 60 or more days past due on an auto loan, have lowered from 3 percent to 1.63 percent.
Michael Koukounas, Senior Vice President of Special Client Services for Equifax, explains “With unemployment rates remaining elevated for a prolonged period, auto lenders have proactively adopted more comprehensive data and verification tools for greater loan-level transparency in evaluating a wider band of consumers, which has helped enable the auto lending industry to recover more quickly than others,” according to the release.
The auto loan industry may very well be on to something, as their delinquency rate is far below those rates other loan types are experiencing.
With a collective amount of $32 billion in originated loans, the growth between this year and last that the car loan industry is experiencing is just under 15 percent to be exact.
The report by Equifax also shows that average monthly payments remained relatively stagnant; signifying the growth in the auto loan industry is tied to the increase in auto loans issued as opposed to an increase in loan costs.