Nam Y. Huh, Associated Press
LOS ANGELES — Many Americans are carrying higher auto loan balances, but the increased financial strain isn't resulting in more missed payments, new data shows.
Average auto loan balances have increased amid a strong market for cars and trucks this year, rising to $13,435 in the second quarter. That's up 4.5 percent year-over-year and a 1.3 percent increase from the first quarter. Many drivers have moved to replace older vehicles after holding back on purchases for several years following the last recession. Low interest rates and good lease terms have also helped fuel U.S. auto sales, which jumped 14 percent to 1.3 million in July.
As more drivers have gone car shopping, lenders have responded, making loans available to more borrowers, even those with less-than-perfect credit. The new loans, which tend to have higher balances early on, are pushing up the average balance.
But Americans are keeping up with the payments. The rate of U.S. auto-loan payments late by 60 days or more was essentially flat in the April-June quarter, inching to 0.80 percent from 0.79 percent in the second quarter of last year, credit reporting agency TransUnion said Tuesday. The delinquency rate dropped from 0.88 percent in the first three months of the year.
"It's encouraging to see consumers take on more auto debt while delinquencies remain low," said Peter Turek, TransUnion's vice president of automotive. "Consumers clearly are more confident in managing additional debt."
The late-payment rate among subprime borrowers, or those whom lenders deem a higher credit risk because of their track record of managing debt, did edge higher in the second quarter. It rose to 5.02 percent from 4.94 percent a year earlier.
Those borrowers also were carrying balances that were, on average, more than 7 percent higher than in the same quarter last year, TransUnion said. Subprime borrowers accounted for 14.9 percent of all auto loans in the second quarter, unchanged from the same time in 2012.
All told, auto-loan volume grew about 4 percent in the second quarter versus the same period last year.
- How will students pay for soaring debt? Tax...
- Borrowers using student loans for cash, not a...
- Why the rise of smart machines could...
- For women, lower grades might mean more money
- How expensive is your ego?
- Nickel and dimed: How pennies and nickels are...
- Balancing act: Lunch breaks make for a tasty...
- Beware: Tax season is scam season
- How will students pay for soaring debt?... 63
- The disappearing 401(k) and inequality 20
- Utah unemployment rate hits five-year low 18
- Dave Ramsey says: Don't waste your... 16
- Nickel and dimed: How pennies and... 4
- Randy Shumway: China is a vital... 4
- For women, lower grades might mean more... 2
- Borrowers using student loans for cash,... 2