American consumers are doing a better job of avoiding car repossessions and making their auto loan payments on time. Financial information provider Experian Automotive recently reported a 27.6 percent drop in the number of auto repossessions from the second quarter of 2011 to just .43 percent of all loans in the second quarter of 2012. It appears the trend may continue. The number of people with auto loan payments 30 days or 60 days late also fell by more than 2.5 percent from last year.
While the number of car loan defaults has decreased, the amount of money lent to consumers has increased by 5.5 percent. Experian reported that the total amount of auto loans is $682 billion, up by $32 billion from the second quarter of last year.
This financial news comes on the heels of a survey by the federal reserve showing that auto loan lenders are slowly loosening their guideline restrictions on consumers. The survey asked 87 loan officers from foreign and domestic bank branches in the U.S. about their experience with different types of loans and lending trends. Some senior loan officers who answered the survey indicated that the demand for auto loans and credit cards at their banks is growing, as is the amount of money lent. While not all loan types are growing, those surveyed also noted that competition from fellow lenders is becoming tougher, prompting them to lend more money for autos at a lower interest rate.
For consumers interested in buying a car with an auto loan, new data indicates that the changing circumstances are in their favor.
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