Rise in auto loan delinquencies

Auto loan delinquency rates worsened towards the end of last year according to the latest survey from the Federal Reserve Bank of New York, which also shows that auto originations rose by 17% in the final quarter of 2014.

In its “Q4 2014 Household Debt and Credit Report”, the bank said loan and lease originations for new and used cars reached $102 billion in the fourth quarter, up from $87.5 billion in the year-earlier period.

Fourth quarter originations were down from the Q3 total of $105 billion, which was the highest for any quarter since Q3 2005, when originations reached $112.8 billion.

The 90+ days delinquency rate for auto loans now stands at 3.5%, up from 3.1% in the previous quarter and higher than the 3.35% recorded in the year-earlier period. This marks the first year-over-year increase in 90-day delinquencies since Q4 2012, although it is below the high of 5.27% recorded in Q4 2010, according to Fed statistics.

Total auto debt, including loans and leases, reached $955 billion at the end of 2014, up $92 billion, or nearly 11%, from where it stood as of 31 December 2013.