TransUnion expects the average auto loan debt per borrower to increase to $18,509 by the end of 2016, a more than $3,500 increase since the Great Recession. The firm noted, however, that subprime auto loans still make up less than the 23.7% share recorded in the third quarter 2009.
Despite auto loan balances rising by $101 billion, delinquencies remained flat from a year ago. Officials with the credit reporting agency said their seeing controlled and deliberate growth by lenders.
Credit unions are competing aggressively in the automotive marketplace, financing one in four auto loans so far in 2015, CU Direct reports.
The total balance of auto loans in December 2014 was $975 billion, representing 33.2% of total outstanding non-mortgage consumer debt, according to Equifax.
TransUnion’s annual auto loan forecast calls for auto loan debt to rise to $18,244 by the end of 2015. This would mark 19 consecutive quarters of increases since the first quarter of 2011.
In the third quarter of 2014, 30- and 60-day automotive-loan delinquencies grew 3.7% and 8.6%, respectively, from the previous year. The change was due to growth in subprime loans.
Taking a customer-first approach to the buy-here, pay-here business can minimize your repossessions and encourage repeat and referral business.
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