Auto Loan Balances Hit Record High To End 2014

It's no secret that some people need help affording a used car. Few drivers have enough cash to cover the full cost of a vehicle, so most turn to financing options such as auto loans to help them get behind the wheel. You don't have to have a sparkling credit history to get these loans, either, as more subprime borrowers are getting opportunities to do so. 

Auto loan balances continue to grow
Experian Automotive recently released its latest report, the State of the Automotive Finance Market, which detailed the loan landscape in the fourth quarter of 2014. According to the data, the total outstanding balance on all loans reached $886 billion at the end of last year. That's the highest mark ever recorded. 

Some of that growth can be attributed to an increase in subprime loans. The volume of both subprime and deep-subprime loans grew, despite the fact that the total market share for the two segments declined from the same time last year, the report found. 

"Whenever there is an uptick in the number of loans to sub-prime and deep sub-prime customers, there is the potential for a 'sky is falling' type of reaction," said Melinda Zabritski, Experian's director of automotive finance. "The reality is we are looking at a remarkably stable automotive-loan market, in part because consumers are continuing to stay on top of their payments." 

Managing loans 
Although subprime borrowers are still taking out their fair share of auto loans, the delinquency rate hasn't grown – a good sign that these drivers are paying back their debts. According to Experian, 30-day delinquencies grew only slightly to 2.62 percent from 2.61 percent, while 60-day delinquencies fell from 0.73 percent to 0.72 percent.

This stability may encourage lenders to keep offering deals to subprime buyers. It also shows that the loans are good for borrowers as well, with these individuals able to make monthly payments and stick to a repayment plan. 

Even if you don't have the best credit history, you can find opportunities to buy used cars with the help of auto financing. The financing department at NJ State Auto is ready and able to assist you in taking advantage of these deals. Its experts can get you same-day credit approval no matter what your background is, allowing you to show up, select a vehicle and drive off the lot in a timely manner.