With the Great Recession officially a memory for most consumers, Americans are both buying and financing cars. A lot , as it turns out, as auto loan debt has tipped over the $1 trillion mark for the first time in U.S. history.
That figure comes care of the New York Federal Reserve, which estimates that on the whole American consumers are carrying about $12 trillion in total indebtedness, an amount that has ticked up by about $2 billion since Q2 2015.
Between April and June of this year, consumers grabbed around $119 billion in auto loans, a notable jump from the $95 billion taken out in loans in Q1. If all continues apace, the industry could pass the previous record of 17.4 million loans originated in the year 2000.
As for the negative impacts of debt, the report found that foreclosures reached a new low, with 95,000 new foreclosures in the second quarter, down from 112,000 in the previous quarter.
Auto lending has not been alone in being on the rise. Credit card balances increased by $19 billion. On the flip side, mortgage balances and home equity lines of credit dropped by $55 billion and $11 billion, respectively.
While lending rates are up, default concerns, as of yet, have not surfaced as the uptick in lending has not gone deep into the sub-prime borrower market.
“Persistently tight underwriting standards imply that new mortgages continue to be originated predominantly to the most creditworthy borrowers,” Wilbert van der Klaauw, senior vice president at the New York Fed, said in a statement. “The low rates of delinquency and new foreclosures reflect the higher quality of outstanding mortgage debt and improved economic conditions.”
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