In the first half of 2018, U.S. car buyers borrowed some $279 billion to purchase a new or used vehicle. That total is up by 3.5% year over year. A total of 12.4 million auto loans were made in the same period, a year-over-year increase of 1.6%.
The average loan amount for all auto loans issued in June of this year was $22,899, an increase of 2.2% compared to the average loan in June 2017. The data were reported Tuesday by credit score provider Equifax.
Gunnar Blix, deputy chief economist for Equifax, commented:
Despite a pace of sales that’s slightly off the record-setting mark of 2016, car shoppers are financing more through the mid-way point of this year, a clear reflection of the continued increase in the price of cars and trucks. We’re also continuing to see strong sales activity for used vehicles, with the first half of 2018 on pace with what we saw in 2017, as shoppers realize they can find bargains on slightly used, off-lease vehicles that are readily available.
Auto leases for the first half of this year have declined by 1.2% to 1.99 million, totaling $32.4 billion, a drop of 2.9% in lease balances. The average origination balance for a lease issued in June of this year was $16,617, down 0.8% year over year. Lease values reflect only the contract amount and do not exclude the expected residual value of the vehicle at the end of the lease term.
Equifax also reported that the number of subprime loans (to borrowers with credit scores below 620) to buyers fell by 1.6% to 2.78 million year over year and dipped by 0.9% in loan balances to $49.9 billion. The average subprime loan amount was $18,205, up 1.9% year over year.
The number of subprime lease originations fell by 5.4% in the first half of the year to 180,500 representing a total balance of $3.12 billion, down 5.6% year over year. The average subprime lease amount was $17,629, a drop of less than 0.1% year over year.