Auto lenders probably wish they could set current trends on cruise control.
Demand for automobile loans has soared to new levels, Equifax
Auto loan originations rose 5.2% to 4.1 million through February. That's the highest rate since Equifax began tracking the data in 2005.
The rate of loans that are at least 60 days past due, which the industry classifies as severe delinquencies, fell to 0.81% in April, the lowest level since September 2005.
The low delinquency rate is due in part to dealers "qualifying the right borrowers across the entire credit spectrum," Dennis Carlson, Equifax's deputy chief economist, said in a news release.
"There's been much concern about the growth of auto lending, particularly in the subprime space," Carlson said. "Yet historically low delinquency rates reveal that the sector continues to perform well."
Additionally, lenders are increasingly looking at "non-traditional data" to build "a more accurate picture of a consumer's financial standing," Carlson said.
About 980,000 auto loans have been made this year to borrowers that are generally considered subprime, an 8.1% increase over last year.
Banks are also handling more auto leases. Banks held 973,100 auto leases in April, a 12.1% year-over-year increase, Equifax estimated.
