More consumers took out auto loans while fewer fell behind on their payments, a report just out last week shows.
U.S. borrowers owed $782.9 billion on auto loans in the third quarter of this year, Experian Automotive report shows. It is $103 billion more than the amounts owed in the same period the year before. This is the highest in seven years since the credit-reporting agency began tracking the numbers.
Moreover, 30-day auto loan delinquencies fell to 2.58 percent from 2.67 percent last year. It is not surprising why lenders can easily and comfortably loosen their credit standards.
Experian Automotive Senior Director of automotive lending Melinda Zabritski said in a statement, “The combination of higher loan balances and relatively flat loan delinquencies is good news for everyone connected to the automotive industry, including consumers, lenders, retailers and manufacturers.”
The credit bureau also said that low delinquencies stimulate lending, which stimulate more auto purchases, building up all the members of the industry all at the same time.
California, Texas and Nevada are among the states with quickest loan balances. Meanwhile, Hawaii, Vermont and Oregon demonstrated the biggest improvements in 30-day auto loan delinquencies.