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Consumers with an Auto Loan Reach Highest Levels since 2009

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The latest TransUnion Industry Insights Report found that 80 million consumers had an auto lease or loan as of year-end 2016—the highest level TransUnion has observed since at least Q3 2009—as approximately 4.4 million additional consumers took on an auto lease or loan in 2016.

For the second consecutive quarter, total auto balances had a YoY growth rate below 10%, reflecting the slower growth we’re seeing in new vehicle sales. Total auto loan balances continued to climb at the end of 2016, closing the year at $1.12 trillion. The total balance grew 8.3% during 2016, slower than the average growth rate of 10.9% between 2013 and 2015. The average auto balance per consumer also rose slightly to $18,391, up from $18,004 in Q4 2015.

Growth in auto finance has been fueled by both rising new loan amounts and growth in originations

Auto loan originations slow, along with new car sales

In the third quarter, auto loan originations declined YoY for the first time in six years. Prime plus and super prime originations continued to grow while prime, near prime and subprime originations declined in Q3 2016, indicating lenders are beginning to shift their focus away from the riskiest and most competitive segments that have put pressure on risk-adjusted margins.

Auto originations remain historically high but growth appears to have stopped

For more insights into auto loans, auto leasing and consumer credit trends, download TransUnion’s Q4 2016 Industry Insights Report. You can view the TransUnion Q4 2016 Industry Insights Report webinar on-demand and check out interactive data on the TransUnion Insights page.

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