Latest Equifax Auto Credit Trends Illustrate Softening Loan Balances

Here are the latest auto credit trends as reported by Equifax through March 2019:

 

  • Equifax is reporting data that show the increase in loan balances on both financed and leased vehicles may beginning to slow.
  • Balances on loans in the period ending January 2019 showed an increase of 2.8% from the year earlier, this number shrunk to just 1.3% in the period ending March 2019.
  • Balances on leases in the period ending January 2019 showed an increase of 3.0% from the year earlier, this number shrunk to just 0.5% in the period ending March 2019.

 

Auto Loan Originations Observations

Originations through March 2019 reported as of May 2019:

 

5.90 million auto loans, totaling $135.5 billion, have been originated year-to-date. This is a 1.0% decrease in accounts and a 1.3% increase in balances over this

time last year.

 

Auto loans represent 86.6% of all auto account originations and 89.8% of auto origination balances YTD.

 

1.39 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 1.0% decrease from March 2018. These newly issued loans have a corresponding total balance of $25.5 billion, a 2.4% increase year-over-year.

 

Through March, 23.5% of auto loans were issued to consumers with a subprime credit score, and they accounted for 18.8% of origination balances. In 2018 YTD

the account share was 23.5% and balance share was 18.6%.

 

The average origination loan amount for all auto loans issued in March 2019 was $23,182. This is a 3.1% increase over March 2018. The average subprime loan amount was $18,552. This is a 3.6% increase compared to March 2018.

 

Auto Lease Originations Observations

Originations through March 2019 reported as of May 2019:

 

914.3 thousand auto leases, totaling $15.4 billion, have been originated year-to-date. This is a 3.1% decrease in accounts and a 0.5% increase in balances, from this time last year. Auto leases accounted for 13.4% of all auto accounts originated through March, and 10.2% of balances.

 

85,660 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 5.4% decrease from March 2018. These newly issued leases have a corresponding total balance of $1.53 billion, a 1.6% decrease year-over-year.

 

Through March, 9.4% of auto lease accounts and 9.9% of total balances were issued to consumers with a subprime credit score.

 

The average origination balance for all auto leases issued in March 2019 was $16,710. This is a 2.7% increase from March 2018. The average subprime lease amount was $17,712, a 2.9% increase over a year ago. Note that lease origination values reflect the contract amounts only and exclude expected vehicle residual values.

 

"We're certainly keeping a close eye on credit trends as they relate to originations and balances for both financed and lease environments as we move through 2019," said Jennifer Reid, Equifax’s vice president of Automotive Marketing and Strategy. "The lower percentage increase in balances for loans and leases at the end of March indicates that dealers and lenders continue to need advanced data to help them stay ahead of the competition by deciphering key consumer and market trends driving a change in vehicle affordability patterns to arrive at the right price and loan balance."

Views: 18

Comment

You need to be a member of DealerELITE.net to add comments!

Join DealerELITE.net

Latest Activity

Mike theCarGuy Correra posted a video

How Dealerships Can Overcome Customer Skepticism in Service

Mike Correra shares a simple way for dealers to legitimize recommended services and overcome any customer skepticism.
25 minutes ago
Dan Beres posted a blog post
10 hours ago
Maria Watson posted a blog post

Ship your logistics internationally with the most trusted agency

Transportation of goods between countries takes place for many reasons. The majority, however, is…See More
yesterday
John Sternal posted a blog post

Beep Appoints Clayton Tino as Chief Technology Officer

Extensive Experience in Engineering, Platform Design and Software Developmentto Innovate and Scale…See More
yesterday
Dave Anderson posted a blog post

Do Moore, Be Moore, 4 Moore

I've never done a podcast episode quite like this one. In it I share a touching, real life story of…See More
Tuesday
Michael Trasatti posted a blog post
Tuesday
Dane Saville posted a blog post

Stimulate More Interest in Your New and Used Cars | KPI Cafe Season 3 Bonus 2

Host Dane Saville dives into the details for creating diverse new and used car campaigns for your…See More
Monday
Bill Wittenmyer posted a video

#WittsWiseWords - Don't Be a Seatbelt Manager

Instead of staying tethered to your cushy swivel chair, Bill Wittenmyer encourages managers to make it a point to wander a bit throughout the day to spot iss...
Monday
Michael Trasatti posted a video

Why Do Video Blogs?

Mike Trasatti shares why video blogs are an important asset.
Monday
Dane Saville posted a blog post

How Your Dealership Can Have Social Media Mania, Brother! | KPI Cafe Season 3 Episode 3

Host Dane Saville conjures up the power of Hulkamania to talk about a remarkable paid social media…See More
Dec 6
Scot Eisenfelder posted a video

CarMax is winning by Playing Moneyball

Scot Eisenfelder explains how CarMax enjoys tremendous market value by levering its data in every single operation.
Dec 6
Jim Flint posted a blog post
Dec 6
Mike theCarGuy Correra posted a video

Can New Technology Make A Dealership Less Efficient?

Mike Correra shares how dealerships can adopt new technology more efficiently.
Dec 5
Richard Keeney posted a blog post
Dec 5
Damian Boudreaux posted blog posts
Dec 5
Lehel Reeves posted a video

3 Types of Video that Lead to Increased Lead Conversion

Lehel Reeves shares three types of video responses to send to your customers that can increase show rate and lead conversions.
Dec 4
Rob Gehring posted a blog post
Dec 4
Bill Wittenmyer posted a video

#WittsWiseWords: You Can Still Be The "Go-To Person" for Digital Retail

Digital retail opens new possibilities and responsibilities for engaging with today's connected car shopper. As Bill Wittenmyer explains, being the "Go-To" p...
Dec 4
Adam Swanson posted a blog post
Dec 3

Get Newsletter

© 2019   Created by DealerELITE.   Powered by

Badges  |  Report an Issue  |  Terms of Service