After the percentage of seriously delinquent auto loans reached its highest level since March 2012, the New York Fed is keeping a close eye on a recent uptick in auto loan originations to borrowers with subprime credit and an increase in delinquencies among younger buyers.
The central bank on Tuesday released its Household Debt and Credit Report for the fourth quarter of 2018. The subprime origination boost and delinquency rise are a couple of potential problem areas in the largely positive report that said auto loans were in “high gear” on average.
Overall, the 90-day delinquency rate represented 4.47 percent of the outstanding balance in the fourth quarter of 2018, up from 4.05 percent a year ago and the highest since 4.55 percent in the first quarter of 2012, the New York Fed said.
“Although rising overall delinquency rates remain below 2010 peak levels, there were over 7 million Americans with auto loans that were 90 or more days delinquent at the end of 2018,” the New York Fed said in a blog.
Still, the auto loan balance — at $1.3 trillion in the fourth quarter — had surged 79 percent from the fourth quarter of 2010, so the more than 7 million borrowers whose loans were 90 days or more delinquent at the end of last year represented more accounts but a smaller share of the total loan balance.
Total auto originations, including loans and leases, new and used vehicles, totaled $144.3 billion in the fourth quarter, an increase of 5.2 percent from a year ago.