New delinquent U.S. car loans at 8-year peak: NY Fed survey

[February 17, 2017]  NEW YORK (Reuters) - More Americans fell behind on their car loan payments in the fourth quarter, bringing auto delinquencies to their highest since the height of the financial crisis, Federal Reserve Bank of New York data released on Thursday showed.

Car loans delinquent by 30 days or more grew to $23.27 billion, the most since $23.46 billion in the third quarter of 2008. They were up from $22.98 billion in the prior quarter.

Seriously delinquent auto loans whose payments were 90 days or more past due jumped to $8.24 billion in the fourth quarter, the highest since the third quarter of 2016, according to the survey.

Delinquency is a predictor on possible losses for carmakers, which often make low interest loans to attract buyers.

Last month, Ford Motor Co's <F.N> finance arm said it expected a pickup in loan losses from historically low levels following a rise in delinquencies and car possessions.

"Credit losses have been at historically low levels for quite some time, and we continue to see credit losses increase

toward more normal levels," Ford Credit said in a presentation of its fourth-quarter results and 2017 outlook.

The increase in late loan payments coincided with drivers loading up on debt to buy the latest car, trunk and SUV models, fueling expectations for record auto sales in 2017.

In the fourth quarter, $142 billion in car loans were generated, giving 2016 the most auto loan originations in the 18-year history of the data, the New York Fed said.

A potential car buyer looks at vehicles on a lot in Silver Spring, Maryland, September 1, 2009. REUTERS/Jason Reed

Auto debt hit $1.16 trillion, with a $93 billion rise over the year.

The increase in car loans was part of a broader growth in household debt in the fourth quarter which almost hit an all-time high in the fourth quarter, reaching $12.58 trillion, according to the survey.

Total debt was up $460 billion from a year ago and was just 0.8 percent below an all-time peak of $12.68 trillion in the third quarter of 2008, before the worst of the financial crisis and deep recession, the data showed.

Some 4.8 percent of all debt was in some stage of delinquency.

Mortgage debt totaled $8.48 trillion at the end of the last quarter, up $231 billion from a year earlier. Student loan debt stood at $1.31 trillion, up $78 billion from a year ago.

(Reporting by Jonathan Spicer and Richard Leong; Editing by Jeffrey Benkoe and Richard Chang)

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