CHICAGO — Auto loan balances surpassed $1 trillion in the third quarter, rising 11.1% from a year ago according to TransUnion. In the past year, auto loan balances have increased by $101 billion.
The credit reporting agency also reported that auto balances in the subprime risk tier remained the smallest segment, accounting for 15.3%, or $154 billion, of total auto loan balances. While small, subprime’s share of auto loan balances is at its highest since the first quarter 2011, while consumers in the prime or better risk tiers accounted for $670 billion of total auto loan balances.
“As total auto loan balance rises, we’re seeing controlled and deliberate growth by lenders,” said Jason Laky, senior vice president and automotive business leader for TransUnion. “Consumers continue to feel confident in their employment and job prospects, and their appetite for new auto loans reflects this confidence.”
The average balance across all auto loan accounts was $14,515 in the third quarter, a 2.7% increase from a year ago and the slowest pace of average balance growth since the fourth quarter 2011. Additionally, the average subprime auto loan balance increased 4.2% from a year ago to $13,890 in the third quarter — the lowest growth rate since early 2012.
Loans 60 days or more past due remained flat from a year ago, accounting for 1.16% of outstanding balances. And according to TransUnion, nearly 75 million consumers have an open auto loan account, an increase of five million from a year ago and an increase of two million from the second quarter.
“More consumers have access to auto loans, yet delinquencies remain low as [consumers] continue to responsibly manage their payments,” Laky said. “Consumers are taking on more and bigger auto loans in today’s low-rate environment, but we see no cause for concern as delinquencies remain steady.”
After surpassing seven million in new originations in the second quarter, new originations grew to 7.3 million in the third quarter. That’s up 13.5% from the first quarter and up 6.4% from the second quarter 2014.