Experian Automotive: Auto loan balances grow at fastest rate since 2006

Thirty-day delinquencies for Q2 hit lowest level in the past five years

SCHAUMBURG, IL -- Aug. 12, 2015: Experian Automotive today announced that the total dollar volume for outstanding automotive loan balances grew by $92 million from the second quarter of 2014 to the second quarter of 2015. It was the largest dollar volume growth since 2006, according to Experian's latest State of the Automotive Finance Market report. Findings from the report showed that total loan balances also reached a record-high $932 billion in the second quarter of 2015, up from $840 billion in the second quarter of 2014.

In addition to rapid growth and record-setting dollar volumes, the automotive loan market showed increased stability, as consumers continued to make timely payments. In the second quarter of 2015, the 30-day delinquency rate dropped to the lowest level for a Q2 period in the past five years at 2.32 percent, down from 2.37 percent in the second quarter of 2014. The 60-day delinquency rate was up, but only slightly, from 0.603 percent in the second quarter of 2014 to 0.607 percent in the second quarter of 2015.

"The automotive loan market is working the way it's supposed to, with loans being made, vehicles purchased and payments made on time," said Melinda Zabritski, Experian's senior director of automotive finance. "The automotive loan market is gaining momentum while maintaining remarkable stability. It's a good sign for the economy overall."

Lenders maintained a balanced strategy in the second quarter of 2015. Subprime loans and deep-subprime loans grew as a share of the market but were balanced out by growth of the super-prime risk tier. The combined 20.02 percent share for subprime and deep subprime was up slightly from 19.92 percent in the second quarter of 2015. Super prime grew from 20.68 percent share in the second quarter of 2014 to 20.99 percent share in the second quarter of 2015.

"Overall, lenders are taking a balanced approach to their portfolios, with slight growth in subprime and deep subprime balanced by the uptick in loans to the super-prime risk tier," Zabritski continued. "There really is nothing alarming about the growth seen in subprime loans, provided consumers continue to make timely payments."

On a state-by-state level, the highest delinquency rates were found primarily in the South, while the states with the lowest rates typically were found in the Midwest and the Northwest.