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Total balance of auto loans reaches all-time high

September 12, 2014
For the first time, the total balance of auto loans exceeds $900 billion, as favorable auto lending credit trends continue in 2014.
"Auto lending continues to thrive, accounting for more than 50 percent of all new non-mortgage lending through April of 2014," Dennis Carlson, deputy chief economist at Equifax, said in a recent press release.
Record high loan balances and new loans
According to this report, the total auto loan balance just midway through 2014 already is at an astounding $902.2 billion, an all-time record and a year-over-year increase of 10 percent. At the same time, the total number of outstanding auto loans exceeds 64 million.
The total number of new auto loans opened year-to-date by April 2014 was 8.1 million nationwide, totaling a whopping $163.5 billion balance in new credit. It is the highest number of April year-to-date new auto loans in 8 years, and the highest April year-to-date auto credit balance since 2005.
"[C]onsumers are responding to the improving economic conditions by making the decision to purchase newer vehicles," Carlson said. This is the same story that credit data trends have been telling us all year.
Low auto loan delinquency rates continue
Carlson said auto loans are growing by leaps and bounds because lenders are offering very good interest rates and borrowing terms, in response to record low delinquency rates. For the third month in a row, the percentage of auto loans noted as "seriously delinquent" has hovered below 1 percent for the total outstanding balance of auto loans.
The year-to-date total number of newly originated auto loans for consumers (also known as subprime borrowers) with credit risk scores at or below 640 is 2.6 million, accounting for 32 percent of all outstanding auto loans. And at $46.2 billion, the total subprime auto loan balance makes up 28.2 percent of today’s total new auto balance and is at an 8-year high.
More auto sales match growing balance of auto loans
Auto loans aren’t the only vehicle-related figures on the upswing. Auto sales in the first half of 2014 beat all expectations and are at levels not seen since 2006, according to news agency Reuters. 
The news agency reports that auto sales increased 1.2 percent in the U.S. in June, a pleasant surprise for those familiar with the 3 percent decline industry experts had forecasted. At the same time, the seasonally adjusted annualized sales rate reached 16.98 million vehicles, a figure not seen in 8 years.
The auto loan industry continued to enjoy strong performance midway through 2014; consumers are borrowing more money than ever before to buy new vehicles while keeping up with their loan payments.