WP Reports Capitol Sees Auto Loan Porfolios Grow
WASHINGTON, D.C. — According to a weekend report from The Washington Post, auto loan growth in on the rise, especially in the Capitol.
The WP reported that low interest rates contributed to the uptick in top auto lender’s portfolios in the Washington area.
Per the WP report, the top 25 auto lenders grew their portfolios an aggregate 3 percent to $31.5 billion in the last three months of 2011, according to SNL Financial.
Delving into the particular lenders’ numbers, Capital One Financial Corp.’s portfolio accounted for nearly 70 percent of the total auto loans within the reviewed cohort.
“The McLean-based institution registered a 6.6 percent increase over the third quarter 2011 to $21.7 billion in the fourth quarter,” according to the WP report.
And credit unions “dominated the ranks,” the report explained.
One of the biggest contributors to the credit union climb in auto loans was at the NASA Federal Credit Union, which recorded a 32.7 percent rise for the quarter and 25 percent jump for the year.
Moreover, Apple Federal Credit Union grew its book of auto loans 18.5 percent in the fourth quarter and 26 percent for the year.
And just as OEMs were affected by the natural disasters in Japan and Thailand this past year, banks are feeling the impact, as well.
At Virginia Heritage Bank in Vienna, year-over-year auto lending was flat, though within the last three months of 2011 auto loans climbed 12.8 percent to $65.8 million.
Chief operating officer Charles Brockett was reported saying that the supply chain disruption caused by the earthquake in Japan and floods in Thailand tempered loan growth.
And as made evident by the uptick in auto loans, the WP reports that “consumer appetite for cars was evident in the February retail sales figures from the Commerce Department, which tracked a 1.7 percent increase over the prior year to $70.5 billion in sales."
And if interest rates stay low, analysts expect consumers to continue hitting the lots through the rest of the year.
And just how low are these rates?
According to Experian Automotive, interest rates last year fell to the lowest levels since 2008.
“And the average interest rate on a loan for a new vehicle slid to 4.52 percent in the fourth quarter of 2011, down from 4.84 percent a year earlier. The rate dropped from 8.71 percent in the fourth quarter of 2010 to 8.68 percent in 2011 for used cars,” the WP reported.
The report concluded by noting that consumers are not only taking advantage of these rates to purchase vehicles, but to also refinance existing ones.
Apparently, applications to refinance car loans in the Washington area climbed 6.5 percent from January to March 15, year-over-year, according to LendingTree.com.
For the full WP report, see here.