Originations for car buyers and lessees with sub-620 credit scores grew 13% to $27.9 billion, accounting for 21.8% of total outstanding auto balances in the Fed's latest Household Debt and Credit report.
The Fed’s latest Household Debt and Credit Report finds subprime auto loan and lease originations and 90-day delinquencies are on the rise.
Illustration by jamesbhl via Pixabay
The Federal Reserve Bank of New York’s latest Household Debt and Credit Report finds new auto loan originations declined to $139 billion in the first quarter, a “modest” year-over-year decline. But originations for car buyers and lessees with sub-620 credit scores grew 13% to $27.9 billion, accounting for 21.8% of total outstanding auto balances.
Perhaps more concerning are 90-day delinquencies, which grew 9.2% year-over-year to account for 4.69% of all auto debt, the highest rate since 2011.
Originations for fair (620–659) credit borrowers accounted for $17 billion worth of originations for 13.3% of all balances. The biggest share belongs to prime (760-plus) customers, who borrowed $45.9 billion to claim 35.9% of the market.
Total U.S. household debt, which includes auto, home, and student loans, home equity lines of credit and credit-card balances, grew 0.9% to $13.67 trillion, meaning auto loans accounted for 9.4% of all debt in the first quarter. Mortgage balances grew by $120 billion and student loans grew by $29 billion year-over-year, but credit-card balances and home equity lines of credit fell by $22 billion and $6 billion, respectively.
This story originally appeared on F&I and Showroom, another Bobit Business Media publication.
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