According to gathered data, the sales increase carries bigger car loans, but the additional financial effort isn’t resulting in more missed payments.
Many drivers have moved to replace older vehicles after holding back on purchases for several years following the last recession. Low interest rates and good lease terms have also helped fuel U.S. auto sales, which jumped 14% to 1.3 million in July.
Still, this positive trend brought with it increased average auto loan balances, rising to $13,435 in the second quarter. That’s up 4.5 percent year-over-year and a 1.3 percent increase from the first quarter.
As more drivers have gone car shopping, lenders have responded, making loans available to more borrowers, even those with less-than-perfect credit. The new loans, which tend to have higher balances early on, are pushing up the average balance.
Even so, the rate of U.S. auto-loan payments late by 60 days or more was essentially flat in the April-June quarter, inching to 0.80 percent from 0.79 percent in the second quarter of last year, credit reporting agency TransUnion said. The delinquency rate fell from 0.88 percent in the first three months of the year.