Equifax Reports Ten-Year Low in Auto Loan Severe Delinquencies, Record High in New Loan Originations

As summer selling season heats up, auto consumer demand for loans and leases sizzles

Jun 04, 2015, 09:44 ET from Equifax Inc.

ATLANTA, June 4, 2015 /PRNewswire/ -- According to the latest Equifax Inc. (NYSE: EFX) National Consumer Credit Trends Report, new auto loan originations have reached record highs, while severe delinquency rates are the lowest they have been in nearly a decade. At the same time, auto leasing has surged as consumer demand for new vehicles remains strong.

The severe delinquency rate (the percentage of outstanding loans that are 60 or more days past due) for auto loans and leases in April 2015 was 0.81%, the lowest level since September 2005. This uptick in performance coincides with continued growth in the auto loan market – the number of new auto loan originations in 2015 through February reached 4.1 million, a 5.2% increase over the same time period last year and the highest number since Equifax began tracking this data in 2005.

"There's been much concern about the growth of auto lending, particularly in the subprime space, over the past year, yet historically low delinquency rates reveal that the sector continues to perform well," said Dennis Carlson, Deputy Chief Economist at Equifax. "More consumers are staying current on their payments, which is due to both improved economic conditions and the fact that lenders and dealers are qualifying the right borrowers across the entire credit spectrum. Additionally, the inclusion of non-traditional data, as well as instant verification of income empowers lenders by providing a more accurate picture of a consumer's financial standing."

Auto Finance Leader at Equifax, Lou Loquasto says, "Auto lenders continue to offer responsible loans that best fit their customers' needs, enabling disciplined growth throughout the industry, in large part by utilzing more and better data than has ever been available to them before."  

Other highlights from the most recent Equifax data include:

  • Over 980,000 auto loans have been originated year-to-date to consumers with an Equifax Risk ScoreSM below 620. These are generally considered subprime accounts. This is an 8.1% increase over 2014. These newly issued loans have a corresponding total balance of $17 billion.
  • The average new auto loan amount issued in February 2015 was $20,310. This is a 4.2% increase over February 2014.
  • In 2015 through February, 24.2% of newly-originated auto loans were issued to consumers with a subprime credit score, a slight increase in share compared to the same period last year.
  • The average subprime loan amount was $17,363 in February 2015. This is a 4.4% increase compared to February 2014.
  • Total auto loans and leases outstanding as of April 2015 sum to just over $1 trillion, with loans comprising $934 billion and leases contributing $66 billion.
  • Auto leasing has grown for both banks and finance companies. In April 2015, bank portfolios held 973,100 auto leases and finance companies held 6.63 million leases, a 12.1% and 19.1% year-over-year growth rate, respectively, in outstanding lease accounts.

About Equifax
Equifax is a global leader in consumer, commercial and workforce information solutions that provides businesses of all sizes and consumers with insight and information they can trust. Equifax organizes and assimilates data on more than 600 million consumers and 81 million businesses worldwide.  The company's significant investments in differentiated data, its expertise in advanced analytics to explore and develop new multi-source data solutions, and its leading-edge proprietary technology enables it to create and deliver unparalleled customized insights that enrich both the performance of businesses and the lives of consumers.

Headquartered in Atlanta, Equifax operates or has investments in 19 countries and is a member of Standard & Poor's (S&P) 500® Index.  Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. In 2014, Equifax was nominated as a Bloomberg BusinessWeek Top 50 company; its CIO was listed as one of the top 100 by CIO magazine; and the company was named to the Fintech 100 list, was recognized as a top 20 company to work for by the Atlanta Journal-Constitution, and was named a 2014 InformationWeek Elite 100 Winner. For more information, please visit www.equifax.com.

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SOURCE Equifax Inc.