CHICAGO -

TransUnion’s Industry Insights Report found that outstanding auto loan balances surpassed $1 trillion in the third quarter, an 11.1 percent jump year-over-year. But contract holders appear to be maintaining their payments on that growing balance total since delinquencies — the rate of borrowers 60 days or more delinquent on their account — continue to remain flat, coming in at 1.16 percent in both Q3 2014 and Q3 2015.

During a phone conversation with SubPrime Auto Finance News, TransUnion senior vice president and automotive business leader Jason Laky said, “We don’t expect any surprises from a delinquency perspective.

“Auto lending and performance is correlated to the strength in the economy, particularly employment,” Laky continued. “As long as employment continues to grow strongly and consumers have confidence in the economy we’ll continue to see growth in auto sales and financing. Consumers who believe they’ll be employed for a considerable time are willing to go forth and take on a loan to pay for a car.”

In the past year, auto loan balances have increased $101 billion to $1.008 trillion in Q3, according to the latest data.

TransUnion reported nearly 75 million consumers have an open auto account, an increase of 5 million since Q3 2014 when the figure stood at 69.5 million. Analysts pegged the number of consumers with access to an auto loan grew 2 million quarter over quarter from 72.5 million in Q2 2015.

TransUnion also shared information for the subprime space.

Auto loan balances for the subprime risk tier — those consumers with a VantageScore 3.0 credit score lower than 601 — remain the smallest segment with 15.3 percent, or $154 billion, of the total balance. However, analysts pointed out this figure is the highest share of auto balance observed for the subprime risk tier since Q1 2011.

Consumers in the prime or better risk tiers —those with a VantageScore 3.0 credit score higher than 661 — represent $670 billion of the $1 trillion in balances.

The average balance across all auto loan accounts was $14,515 in Q3, a 2.7 percent increase year-over-year, and the slowest pace of average balance growth since Q4 2011.  The average subprime auto loan balance increased 4.2 percent from $13,328 in Q3 2014 to $13,890 in Q3 2015, the lowest growth rate since early 2012.

“As total auto loan balance rises, we’re seeing controlled and deliberate growth by lenders,” Laky said. “Consumers continue to feel confident in their employment or job prospects, and their appetite for new auto loans reflects this confidence.”

“More consumers have access to auto loans, yet delinquencies remain low as they continue to responsibly manage their payments,” he continued. “Consumers are taking on more and bigger auto loans in today’s low-rate environment, but we see no cause for concern as delinquencies remain steady.”

Viewed one quarter in arrears (to ensure all accounts are reported and included in the data), TransUnion indicated new auto loan originations exceeded 7 million for the first time in Q2. Up 13.5 percent from Q1 and 6.4 percent from Q2 of last year, originations reached 7.3 million this past quarter.

Along with origination growth, the average new auto loan balance grew to $20,016 in Q2 2015. The average balance increased $567 from the average balance in Q2 2014 of $19,449. New subprime auto loan balances increased 3.7 percent year-over-year from $16,781 in Q2 2014 to $17,357 in Q2 2015.

Another element Laky highlighted with SubPrime Auto Finance News is how much younger borrowers are tapping the market.

TransUnion noted consumers age 30 and younger continue to finance vehicles at a healthy pace, with more than 1 million more young adults opening an auto loan or lease in the past year, analysts determined 11.7 million consumers under the age of 30 have an auto loan or lease reported to TransUnion. That figure is up 1 million, or 9.6 percent, from Q3 2014.

“Contrary to some of the messages about consumers buying and financing cars in this new sharing economy, it’s not true,” Laky said. “As younger consumers are getting settled and employed, building their lives and their families, they’re realizing that they need cars to get the things done that they want to do in their lives, and they’re out there taking loans for them.”

So whether the account holders are young or more mature, Laky maintains the health of the auto-finance market is good, even if some conditions deteriorate.

“If the economy begins to turn and employment increases, that’s when auto lenders can begin to worry about an increase in delinquency,” Laky said. “Even then, I wouldn’t expect a dramatic increase in delinquencies.

"Even in the prior recession, we didn’t see a large increase in delinquencies even as other asset classes were having a big jump,” he continued. “The reason is the auto loan remains the priority loan payment in the consumer’s wallet. It’s a question of how important cars are both in utility for getting to and from a job and getting your family to and from places as well as the lifestyle benefit of having a nice car.”