ATLANTA — According to Equifax's latest National Consumer
Credit Trends Report, new credit for auto originations between January and May of
this year soared to an eight-year high, producing an increase of more than 15
percent from same time a year ago.

Equifax also indicated the total number of new loans during
that span came in at 9.9 million, also an eight-year high and a year-over-year
increase of nearly 12 percent.

Analysts found that the total balance of auto loan
originations year-to-date in May is more than $196 billion and represents more
than 50 percent of all new non-mortgage consumer credit originated in 2013.

"Demand for new and used cars is accelerating with
improvements in the economy and the auto credit industry is supporting that
rise in demand," said Equifax chief economist Amy Crews Cutts.

"The financial crisis, recession and subsequent tighter
lending standards led many drivers to delay the purchase of a new or quality
used car or light truck," Cutts continued.

"Today, buoyed by a better economy, consumers are looking to
finally replace these old cars," she went on to say. "Lending standards are
also relaxing a bit, allowing more otherwise well-qualified subprime-credit
buyers to obtain a new set of wheels."

Other highlights from the most recent data include:

—Balances on outstanding auto loans in July totaled $826
billion, the highest level in five years and an increase of nearly 10.9 percent
from same time a year ago.

—Similarly, the total number of existing auto loans stands
at 61 million, a 54-month high.

—By source, loans funded by banks, savings and loans, or
credit unions are at $397.1 billion, while the total number of loans is 29.3
million — a five-year high for both.

—The total outstanding balance for loans funded by auto
finance companies is $429.7 billion, a 50-month high, while the total number of
existing loans is more than 31 million, its highest level in 46 months.

—Serious delinquencies on auto loans funded by finance
companies in July represented 1.84 percent of outstanding balances, a
year-over-year increase of more than 14 percent.

—Serious
delinquencies on auto loans funded by banks and other depositories stood at
0.34 percent of outstanding balances in July, 5.8 percent lower than the same
time a year ago.

"Lenders are searching for additional consumer insights,
particularly as non-prime volume increases," said Dave Foerster, vice president
and general manager of Equifax Automotive.

"Being able to monitor risk indicators and quickly verify
consumer employment and income speeds up the loan decision process and enhances
the consumer buying experience at the dealership. The result is a win for the
consumer, the dealer and the lender," Foerster added.

Continue the conversation with SubPrime Auto Finance News on LinkedIn and Twitter.

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