Borrowers are beginning to come back into the auto market as lenders ease up on lending restrictions and consumers begin to feel more confident about the economy. Across the country, auto finance lending rose by 7.1 percent, compared with the same time a year ago. Of the top 25 metro areas in the United States, the Houston metropolitan area, including Galveston and Brazoria seem to be the most confident, as they took on 10.3 percent more auto debt than a year ago. Minneapolis-St. Paul had the second biggest increase at 9.9 percent, while Dallas-Fort Worth came in third at 8.8 percent.
According to Trey Loughran, president of the personal solutions unit at Equifax, “Consumers are showing discipline and caution about debt coming out of the recession. Even though people are taking on debt to purchase new automobiles, we also know they are driving their cars longer. We expect the trend of the ‘disciplined consumer’ to continue for some time.” Equifax says that determined consumers remain cautions about taking on new debt following the recession.
While consumer debt levels fell $256 billion versus the same time a year ago, analysts said the decline is the slowest rate of decline since the second quarter of 2009, showing that some of the caution may be starting to lift. The confidence that consumers are showing in the auto market is a good sign that people are feeling more comfortable in taking on new debt. If you are interested in more information on auto financing, click here.