Q3 2015 auto loan originations at 10-year high

Auto debt continued its upward climb during the third quarter of 2015, according to the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit, which shows auto loan balances increased for the 18th straight quarter, this time by $39 billion, and stand at $1.05 trillion as of the end of September.

Auto loan originations were $151 billion in the third quarter, the highest since the third quarter of 2005. New charts introduced in this quarter’s report show that $33 billion of this sum was originated by sub-prime borrowers with credit scores below 620, near the 10-year high and a 14.5% increase from a year ago.By credit score range, the highest segment, with credit scores of 780 and above, increased the most in origination volume, up 21.9% from a year ago. Next-highest was the segment just above sub-prime, in the 620 to 659 range, up 18.7%.

“The growth in auto loan balances and originations has been very robust,” said Donghoon Lee, Research Officer at the New York Fed. “Credit conditions have remained attractive for auto purchasers with both prime and subprime credit.”