This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Equifax Reports Increased Auto Borrowing; Increases In Credit Card Limits Prior To 2013 Holiday Spending Season

Stocks in this article: EFX

ATLANTA, Dec. 19, 2013 (GLOBE NEWSWIRE) -- The latest Equifax (NYSE:EFX) National Consumer Credit Trends Report, indicates that as portfolio quality has improved, originations in multiple consumer loan types have opened to higher risk consumers to varying degrees. This is reflected within the auto lending sector as origination continues to thrive while payment performance improvements for auto loans remain strong.

From an origination standpoint, the most recent data indicates that the auto-lending sector enjoyed its highest September monthly origination totals in eight years, with 1.9 million auto loans originated. Additional origination metrics from same timeframe include:

  • Growth was reported in both financial institution-originated auto loans (more than 950,000) and captive and other finance company-originated loans (more than 975,000). Both sectors realized the highest loan totals for the month of September of the last eight years;
  • Subprime auto lending (defined as having Equifax Risk Scores below 640) now accounts for approximately 30 percent of all auto loans originated today;
  • Total Auto loan amount originated also hit an eight year high at nearly $39 billion; and
  • While total auto loan volumes and amounts exceeded 2006 totals, the average loan amount was slightly less -- $20,179 (2013) vs. $20,420 (2006). This fact, coupled with the lower interest rates being charged today has resulted in an approximately 8 percent reduction in average monthly loan payments for new borrowers.

"The auto finance sector has continued to perform at a high level throughout the year as consumers continue to take advantage of favorable interest rates and look to replace their aging cars," said Equifax Chief Economist Amy Crews Cutts. "The median age of an automobile hit a record high 11.4 months earlier this year according to Polk, and many consumers have reached a point where their cars are beginning to require costly repairs. As confidence in the economy grows, consumers are increasingly making the decision to replace rather than repair their vehicles. This growing trend is reflected in the strong sales of new cars, which will hit over 15.5 million units this year, a six-year high, and the resulting high auto-loan origination totals we're seeing so far in 2013."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs