Optimistic Outlook for Auto Lending in 2014
Feb 21, 2014
TransUnion has stated that financing trends for automobiles are to remain positive in 2014. The credit bureau says this year will feature more leasing, easier access to credit and bigger loans. This news is music to consumer’s ears as new model vehicles hit the dealership lots.
The first half of the calendar year is considered the busiest time for auto dealers. Consumers are interested in new models and as the temperature warms, individuals tend to make larger purchases, chiefly automobiles. However, TransUnion believes that it’s not purchases but leases that will see the biggest boon in 2014. TransUnion figures show more than 1.3 million leases in the first half of 2013, up from about 1 million for the same period in 2012 and the credit bureau believes the trend will continue into 2014.
Peter Turek, TransUnion’s vice president of automotive told Automotive News, “with the number of new models being introduced this year…leasing is going to be a great way for the manufactures to get those new models out there…We expect the number of leases to continue to rise as a percentage of all auto loans in 2014.”
One negative in 2014 is an expected rise in delinquencies as subprime loans continue to increase. TransUnion expects the percentage of auto loans past 60 days or more to increase by 1.19 percent by the end of 2014.
Turek has stated that even though delinquencies will rise in 2014, he expects them to remain well below levels observed during the recession because of relatively strong used-car prices. In many cases consumers who are stuck in a jam will sell their vehicle to pay off their loans.
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