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Auto Loan and Lease Activity Slows as Balances Grow

Equifax analysts say U.S. auto loan and lease originations declined 0.6% and 3.9% year-over-year in the first half of 2019, but balances for new vehicle loans were up 2.6%.

Tariq Kamal
Tariq KamalFormer Associate Publisher
Read Tariq's Posts
November 19, 2019
Auto Loan and Lease Activity Slows as Balances Grow

Sales of trucks and SUVs, such as the Audi Q7, have helped auto finance sources grow balances despite fewer originations.

Photo courtesy Audi USA

2 min to read


ATLANTA — U.S. banks, finance companies, and credit unions funded 12.3 million auto loans in the first half of 2019, totaling $286.2 billion and growing outstanding balances by 2.6% year-over-year. But the number of loan originations declined by 0.6%, and the number of new leases fell by 3.9%, Equifax reports.

New loans and leases for subprime borrowers were down 3.1% and 7.2%, respectively, compared with the first half of 2018. Subprime loan balances grew by 1.3% while subprime lease balances declined by 4.1%. In September, Equifax reported subprime auto loans accounted for 22.7% of the total market in April, an eight-year low.

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Read: Subprime Fell to Lowest Share Since 2011 in April

Average loan amounts for all purchases increased 6.6% to $24,134 and the cost of a new lease increased 1.9% to an average of $16,779.

“According to this data, the number of loans originated is relatively stable, yet loan balances continue to increase. This is slightly different from leases, which are showing a falling number of lease originations but a more moderate rise in balances issued,” Jenn Reid, Equifax’s vice president of automotive marketing and strategy, said in a release.

“These numbers indicate that the automotive market in financing originations has been stable while the amount financed has increased throughout 2019 heading into the final months of the year,” Reid added. “The rising balances are most likely a result of a stronger shift to trucks/SUVs when shopping.”

Read: Auto Loans and Leases Up 1% in Q3

Originally posted on F&I and Showroom

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