May 10, 2013 Philip Burgess
Although the total amount of auto loans increased in the fourth quarter of 2012, delinquency rates shrank, which is good news for the short term lending industry - a major source of auto financing.
The Federal Reserve Bank of New York recently released data showing that during the fourth quarter of 2012, a total of $89.4 billion in auto loans originated. It marked a 4.2 percent increase from the previous quarter.
Consumers are also finding paying off their car loans is becoming more affordable, as the 90 day delinquency rate dropped by 4 percent at the end of 2012.
New York Fed measurements of auto loans take into account all forms of auto financing, not just major bank loans.
According to the St. Louis Business Journal, another reason for the increase in auto financing is also due to improved mortgage rates. The source speculated that many consumers are using the savings from refinanced mortgages to assist with car purchases.
Consumers are feeling good about the economic outlook at the moment which has resulted in a boom in auto purchases recently.