Americans Now Owe $1 Trillion in Car Loans
U.S. consumers have borrowed a record $1 trillion to purchase cars, SUVs and trucks.
Balances on auto loans grew 11 percent year-over-year, or $101 billion, in the third quarter, according to report this week from TransUnion, a credit reporting company. The total for auto loans is now $1.008 trillion. Nearly 75 million consumers have an open car loan account, 5 million more than the same period last year.
The average car loan balance also rose to $14,515, up 2.7 percent from the second quarter, while the delinquency rate remained flat at 1.16 percent.
“When people feel good about their job prospects and finances, they go on vacation, they buy a new car,” says Ezra Becker, vice president of research and consulting in TransUnion’s financial services unit. “When balances go up, it’s not necessarily a harbinger of doom.”
The car loan figures echo growth in credit cards, too. Balances on credit cards rose 4.7 percent, while the delinquency rate inched up 1.43 percent, half of where it was in the third quarter 2009.
In the second quarter, the most recent data, 15.2 million new cards were issued, up 12 percent from last year and the most since the third quarter of 2009. New cards issued to those with blemished credit increased 25.3 percent year over year.
“We believe the number of consumers having access to credit cards to be at a new modern high,” says Paul Siegfried, senior vice president and credit card business leader for TransUnion.
TransUnion’s credit report also noted that the mortgage delinquency rate continued its five-year decline to 2.4 percent. Millennials and those over 65 represent the least risky mortgage borrowers, while Florida experienced the biggest decline in its mortgage delinquency rate, to 3.75 percent from 6.42 percent a year ago.