Data released by credit reporting agency Equifax last week showed that an increase in consumer lending during the month of April was driven by strong growth in the automotive lending sector.
“Auto lending continues to lead the recovery,” Equifax Chief Economist Amy Crews Cutts said. “By any metric you consider, whether new originations, total balances, or low delinquency levels, the auto sector is running on all cylinders. The boom in auto purchases ended in 2004, and people are now thinking about replacing their jalopies as the average age of a car on the road today is over 11.4 years old, and the financing terms are favorable for those with decent credit histories.”
Approximately $70 billion in new credit was issued year-to-date in February—an eight-year high and an increase of more than 13 percent year-over-year.
Outstanding balances on auto loans totaled $884 billion in April, a record high and an approximate 11 percent year-over-year increase.