Auto defaulting down, loan originations up

According to Equifax's May 2011 National Credit Trend Report, auto loan originations increased by 20 percent during the first quarter of 2011 year over year, the Credit Union Times reports. March's total of $1.8 million in loan originiations represented the largest monthly total since the summer of 2008. In addition, the average auto financing amount among borrowers was $18,661 - a more than $200 increase year over year. The report also notes that the average loan amount for prime borrowers is at or above pre-recession levels, as are auto delinquencies and write-offs. "While some sectors of the economy - most notably housing - continue to struggle, the auto lending sector has displayed positive gains," Michael Koukounas, senior vice president at Equifax, told the news source. Auto Loan Daily adds that the default rate for auto loans fell from 1.34 percent in May to 1.29 percent in June, according to an Experian report. The decreased likelihood of defaulting means lenders are now reaching out to sub-prime borrowers - those with a blemish on their credit score - as well.