Most people finance their cars, so it makes sense that auto sales spike when auto loans are up. That’s exactly what happened last month. In the most recent national report from Equifax, automotive consumer credit trends continued to indicate positive news for the industry. For the first six months of this year (January to June), new auto loan originations were up 15 percent over the same period in 2010.
“Auto lending continues to be one of the most promising lending sectors today based on the data,” says Michael Koukounas, senior vice president of special client services for Equifax. “If this momentum can be maintained through the remainder of the year, 2011 year-end totals should reflect a comparable return to normalcy to prerecession lending levels.”
That is a key “if,” but September vehicle sales indicated that consumer spending on new vehicles continued at a reasonably brisk rate given the worries about a double-dip recession that have spooked the stock market. Many manufacturers -- including General Motors, Ford and Chrysler -- registered substantial gains in September versus their sales totals during the previous year.
The auto loan origination total for the first six months of this year came in at 9.6 million, which remains lower than totals in excess of 10 million for the same time period during the prerecession years of 2006 to 2008, so some catching up remains to be done. But some headway has been made. Auto loan origination totals for January to June 2009 and 2010 were 7.5 million and 8.3 million, respectively.
