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Auto Portfolio Balances Have Topped 1.25 Trillion for First Time

The latest auto credit trends as reported by Equifax through May 2018 :

 

Total outstanding auto portfolio balance is now 1.27T (passed 1 ¼-mark). 

 

Auto Loan Originations Observations through May 2018 reported as of July 2018:

  • 10.2 million auto loans, totaling $230.6 billion, have been originated year-to-date. This is a 1.1% increase in accounts and a 3.2% increase in balances over this time last year. Auto loans represent 85.9% of all auto account originations and 89.4% of auto origination balances YTD.
  • 2.33 million auto loans have been originated YTD to consumers with a VantageScore® 3.0 credit score below 620. These are generally considered subprime accounts. This is a 2.5% decrease from May 2017. These newly-issued loans have a corresponding total balance of $41.7 billion, a 1.8% decrease year-over-year.
  • Through May, 22.8% of auto loans were issued to consumers with a subprime credit score, and they accounted for 18.1% of origination balances. In 2017 YTD the account share was 23.7% and balance share was 19.0%.
  • The average origination loan amount for all auto loans issued in May 2018 was $22,946. This is a 2.5% increase over May 2017. The average subprime loan amount was $18,306. This a 0.82% increase compared to May 2017.

 

Auto Lease Originations Observations through May 2018 reported as of July 2018:

  • Over 1.67 million auto leases, totaling $27.2 billion, have been originated year-to-date. This is no change (0.0%) in accounts, but a 1.9% decrease in balances, from this time last year. Auto leases accounted for 14.1% of all auto accounts originated through May, and 10.6% of balances.
  • 154,800 auto leases have been originated YTD to consumers with a VantageScore® 3.0 credit score below 620. These are generally considered subprime accounts. This is a 3.6% decrease from May 2017. These newly-issued leases have a corresponding total balance of $2.67 billion, a 3.9% decrease year-over-year.
  • Through May, 9.3% of auto leases were issued to consumers with a subprime credit score. Through May 2017 the share was 9.6%.
  • The average origination balance for all auto leases issued in May 2018 was $16,325. This is a 0.89% decrease from May 2017. The average subprime lease amount was $17,300, a 0.28% increase over a year ago. Note that lease origination values reflect the contract amounts only and exclude expected vehicle residual values.

 

"As further evidence of the strong automotive market that has been present ever since the end of the recession, total outstanding auto portfolio balances have now eclipsed the one-and one-quarter mark, reaching 1.27 trillion," said Gunnar Blix, Deputy Chief Economist for Equifax. "While total originations are down slightly from the previous two years, clearly the solid economy continues to make shoppers comfortable in absorbing not only higher prices of vehicles, but also in larger balances on their loans."

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