With auto sales cruising at a near record pace, the amount of money borrowed by car, truck and SUV buyers topped $1 trillion for the first time ever.
Experian, which tracks auto loans, says the total amount of auto loans in the first quarter of 2016 was $1.005 trillion, up 10 percent from the same period a year ago.
“We’re still seeing strong sales projections which will help fuel this growth,” said Melinda Zabritski, Experian senior director of automotive finance.
After hitting an all-time high 17.46 million vehicles sold last year, the auto industry continues to enjoy strong sales. During the first third of 2016, the pace of sales was more than 17 million vehicles, with the busy summer season expected to push that pace even higher.
Driving those sales and the larger loan balances is demand for trucks and SUVs, which sell at higher prices than cars.
Meanwhile, the popularity of leasing a new car or truck shows no sign of slowing.
In the first three months of 2016, open leases jumped 27 percent to an all-time high of $76.9 billion.
Experian’s early analysis of auto loans held in the first quarter of the year also found a slight increase in the amount of money being borrowed by those with subprime credit ratings. The percentage of loans 30 and 60 days’ delinquent edged slightly higher. Experian said 2.1 percent of all auto loans were 30 days delinquent in the first quarter while 0.6 percent were 60 days past due.
While delinquencies remain below historical averages, the fact that they are moving higher is a trend Zabritski is watching closely. “From a consumer standpoint we don’t like to see consumers missing payments,” she said. “Historically delinquency is still low but it’s a trend we don’t like to see rise.”
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