As the year 2016 draws near to closing, it is useful to take a look at some trends and statistics from this year -- and also how some of the loan tendencies compare to 2015. Let's take a 2016 automobile loan statistics look at some.
$1 Trillion?
For starters, Americans are borrowing more across the board for car loans. This is true for both new and used vehicles. At the end of the second quarter of this year (June 30th), the total aggregate balance on all outstanding automobile loans came in at just over $1 trillion ($1.027 trillion, to be exact). That total marked the second quarter in a row that the $1 trillion figure had been eclipsed, according to a report from Experian Automotive.
What's the fuss?
This amount of car loan debt is not overly troubling by itself; however, the fact that subprime and deep-subprime loans are rising does constitute some raised eyebrows. In addition, both 30-day and 60-day delinquencies on car loans rose during the second quarter of 2016.
Looking at the year-over-year comparison, the average new car loan was in the second quarter of 2016 was just under $30,000 ($29,880), which represented a hefty increase of 4.8% from the second quarter of 2015. This loan amount also was approximately $4,000 lower than the new vehicle sales price, on average.
As far as payments are concerned, the average monthly payment for the loans in question was $499, an increase from $483 during the same period in 2015. Another factor worth mentioning is that a significant and growing portion of these loans have a longer term repayment period, often spanning up to seven years (84 months).
The Credit Conundrum
At the close of the second quarter of this year, a disturbing report from Fitch Ratings illustrated that the amount of seriously delinquent (more than 60 days past due on their payments) car loans among subprime and deep subprime borrowers checked in at 4.59% -- a marked 17% increase from the same time period 1 year ago.
Will this increase in car loan debt result in an "automobile bubble" like the housing market bubble that burst in 2008? Of course not, since the dollar amounts are far less. Even so, the amount of outstanding auto loan debt -- and the increase in 30 and 60 day loan delinquencies -- are factors that shouldn't go unnoticed.
