Auto Loan Originations Observations From Equifax

Key Insights and Data:

Auto Loan Originations Observations

Originations through September 2019 reported as of November 2019

  • 18.8 million auto loans, totaling $442.5 billion, have been originated year-to-date. This is a 0.5% increase in accounts and a 4.1% increase in balances over this time last year.
  • Auto loans represent 86.4% of all auto account originations and 89.9% of all auto origination balances YTD.
  • 3.98 million auto loans have been originated YTD to consumers with a VantageScore® 3.0 credit score below 620. These are generally considered subprime accounts. This is a 2.0% decrease from September 2018. These newly-issued loans have a corresponding total balance of $75.7 billion, a 3.1% increase year-over-year.
  • Through September, 21.2% of auto loans were issued to consumers with a subprime credit score, accounting for 17.1% of origination balances. In 2018 YTD the account share was 21.7% and balance share was 17.3.
  • The average origination loan amount for all auto loans issued in September 2019 was $24,713. This is a 4.5% increase over September 2018. The average subprime loan amount was $19,971. This is a 5.5% increase compared to September 2018.

 

Auto Lease Originations Observations

Originations through September 2019 reported as of November 2019

  • 2.96 million auto leases, totaling $49.7 billion, have been originated year-to-date. This is a 0.2% decrease in accounts and a 2.2% increase in balances from this time last year.
  • Auto leases accounted for 13.6% of all auto accounts originated through September and 10.1% of balances.
  • 251,860 auto leases have been originated YTD to consumers with a VantageScore® 3.0 credit score below 620. These are generally considered subprime accounts. This is a 3.4% decrease from September 2018. These newly-issued leases have a corresponding total balance of $4.5 billion, a 0.1% decrease year-over-year.
  • Through September, 8.5% of auto lease accounts and 9.1% of total balances were issued to consumers with a subprime credit score.
  • The average origination balance for all auto leases is issued in September 2019 was $17,299. This is a 2.3% increase from September 2018. The average subprime lease amount was $18,452, a 4.0% increase over a year ago. Note that lease origination values reflect the contract amounts only and exclude expected vehicle residual values.

“SUVs and crossovers have continued to be a major reason why auto sales have remained stable throughout much of 2019, generating significant demand to keep sales steady as a result of healthy consumer demand for both financing and lease options,” said Jenn Reid, Equifax’s vice president of Automotive Marketing and Strategy. “Promotional deals, incentives, a stable employment market and waning concerns on areas such as tariffs have all fueled the automotive market through November. It is no surprise we’re continuing to see year-over-year increases in balances particularly, and we believe this trend is poised to continue into the new year.”

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