U.S. Auto Loan Market Upshifts at Year-End
NEW YORK (TheStreet) -- Americans have apparently avoided the Mayan apocalypse, but they're sure spending money on new cars and trucks like the world is about to end.
Figures from TrueCar.com say the estimated annualized rate of total auto sales purchases for 2012 is 15.2 million, light years ahead of the 10.9 million the U.S. auto market saw in 2009.
But that was at the height of the recession, and auto industry bailout or not, Americans largely bailed out of buying new vehicles, hoping for better days ahead.
Those days may finally be here, as new car and truck purchases are trending significantly higher. Besides the improving economy, one reason could be "old car fatigue," as the average age of an American motor vehicle in 2011 was 11.1 years-old, a record high according to Polk, a Southfield, Mich.-based auto data provider.
There's more good news.
U.S. auto consumers seem to have a good grip on their auto loan debt. Chicago-based Transunion reports data showing auto loan delinquencies are at "near record-low levels" and will be throughout next year. Right now, the number of U.S. delinquent auto loan borrowers is at its lowest level since 2008.
On the flip side, consumer auto loans are growing, Transunion reports, with the average debt per borrower rising to $14,133 from $13,689 from now until the end of next year.
The number of "non-prime borrowers" -- auto loan consumers with credit scores below 700 -- is also climbing, suggesting banks and auto loan providers are more amenable to granting new car loans to a wider pool of borrowers.
Again, that's great news for the U.S. economy.
For the past four years, the Federal Reserve has targeted a looser credit environment as a major driver of economic growth. Nobody's saying the economy is completely out of the woods, but lower-credit consumers earning new auto loans is a sign things could be getting better on the personal financial front.