Auto loans increase as delinquencies decrease

The economic recession hit both consumers and businesses hard. As conditions begin to improve, the number of vehicle loans is steadily increasing, including those among subprime borrowers. This could be a result of loan delinquencies decreasing, allowing many short term lending companies and other institutions to extend finance options to individuals. The Wall Street Journal reports that recent research from a leading credit bureau found the total amount of car loans in the second quarter of 2012 reached $725 billion, highlighting the fact that lenders are becoming more confident about extending credit to consumers. Loans for subprime borrowers saw a 1 percent increase from the same time a year ago, as more businesses are relying on alternative credit data to determine credit worthiness of individuals. The same credit reporting agency also found that the number of consumers making late payments on auto loans decreased in the second quarter. The 30-day delinquency rate for vehicle payments was at 2.52 percent, down from 2011's second quarter rate of 2.59 percent. The 60-day delinquency rate also dropped over the same period, coming in at 0.58 percent compared to 0.60 percent.