Car loan balances are at an all-time high since Experian Automotive began tracking the data seven years ago. That news, combined with the fact that car loan delinquencies are relatively flat means that lenders will continue to lend more money to consumers with less-than-stellar credit scores.
In its latest State of the Automotive Finance Market report, Experian noted that outstanding balances had climbed $103 billion in the third quarter this year compared with the same period in 2012, to a total of $782.9 billion in outstanding auto loans. In addition, the number of consumers who were 30 days late on their car payments remained relatively flat, with a slight drop from 2.67 percent in the third quarter of 2012 to 2.58 percent in the same period this year.
One negative finding was that car repossessions jumped 54.4 percent, from 0.4 percent in the third quarter of 2012 to 0.62 percent in the same period this year.
Still, This finding isn't as bad as it seems. The increase in repossessions was limited to finance companies that provide auto loans to the subprime market. Rates for car repossessions for captive finance companies (which are run by automakers), banks and credit unions only dropped slightly during the same time period.
Tara Baukus Mello writes the cars blog as well as the weekly Driving for Dollars column, providing both practical financial advice for consumers as well as insight into the latest developments in the automotive world. Follow her on Facebook here or on Twitter @SheDrives.