Auto lending up, but mostly to older buyers, says Fed report
The amount of auto loans nationally rose for the ninth straight quarter in second-quarter 2013, says a report from the New York Federal Reserve Board. But loans vary by age of the borrower: Consumers aged 60 to 69 are the only ones taking out more loans. Buyers aged 18 to 29 are borrowing less often than in the past. Its another reminder that baby boomers, not young people, are your best customers now, and the best group to market to.
The report indicates that fears of another subprime bubble in auto loans are unfounded. While originations to borrowers with the lowest credit scores have increased, they are just recently approaching historically normal levels and are below those that we saw during the prosperous years leading up to the crisis, says a blog post by New York Fed economists. About 23 percent of new auto loans were to borrowers with credit scores below 620, which is below the historic levels of 25 to 30 percent.Download Bulletin PDF