Due to the economic recession a few years ago, nearly every industry experienced a decline, especially the automobile sector. However, a report by Equifax has revealed that auto loans have recently seen a significant increase, coming to a six-year high.
A total of $52.5 billion was originated in auto loans between January and March 2012, which is a 49 percent increase from the recession's low of $26.9 billion in March 2009, says the report. Additionally, from January to March, the total number of auto loan originations reached 5.2 million, the highest since 2007. The monetary amount of these loans is $100 billion, another six-year high. Equifax also found that lenders experienced a 21 percent increase in new loans since March 2009, which is considered the recession low year. Fox Business reports that lenders are offering borrowers lower interest rates and loosening loan requirements, which may be a reason as to why auto loans have experienced the recent increase. According to a study by a leading insurer, average credit scores have decreased for new and used car loans, coming down to almost pre recession averages. Lenders are also enforcing lower interest rates, with the average being 9 percent for used cars and 4.56 percent for new vehicles, states the news source.