Equifax’s National Credit Trends Report on Auto Lending

Equifax, one of the three recognized national credit reporting agencies, conducts a monthly report called the “Equifax National Credit Trends Report.” It uses Equifax data from more than 585 million consumers and 81 million businesses worldwide.  The latest report released in November 2011 was based on July 2011 data. The largest increase in new auto loans in the past two years was from auto finance companies, than from banks and credit unions.  This increase included both prime and subprime borrowers; subprime borrowers are those below an Equifax score of 640.

Report Highlights

In July 2011, 1.7 million auto loans were originated totaling $32 billion.  The breakdown was 51 percent from auto finance companies and 49 percent from banks and credit unions.

Auto finance companies increased lending by 47% in the past two years.

There were 854,000 auto finance loans in July 2011 compared to 581,300 in July 2009 or a 47 percent increase in two years.

Auto finance company subprime loans comprise 38.5 percent of auto loans, compared to 17.6 percent of loans for banks and credit unions in July 2011.

There were 820,200 auto loans originated by banks and credit unions in July 2011, compared to 832,000 in July 2009 or a 1.4 percent decrease.

From January to July 2011, 11.3 million new auto loans were originated, which was a 13.2 percent increase over the same time frame one year ago, The loan total was $213.9 billion  or an increase of 14.8 percent over the same time frame one year ago.

The average monthly payment barely changed for auto finance loans in one year, it was $407 in July 2011 and $404 in July 2010.   The average auto loan monthly from banks and credit unions differed slightly more, which was $364 in July 2011 and $377 in July 2010.

Delinquency rates defined as 60 or more days past due have declined; they were 1.63 percent in July 2011 compared to almost 3 percent in late 2009.

“With unemployment rates remaining elevated for a prolonged period, auto lenders have proactively adopted more comprehensive data and verification tools for greater loan-level transparency in evaluating a wider band of consumers, which has helped enable the auto lending industry to recover more quickly than others,” said Michael Koukounas, Senior Vice President of Special Client Services for Equifax.

Credit Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

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