Car loan defaults at two-year high

The percentage of consumers falling behind on payments for vehicle loans has hit a two-year high of 6.2 per cent of active credit accounts, according to new figures from Centrix.

The credit bureau’s latest monthly report shows arrears on automotive loans hit that level in January after increasing by 11 per cent from the same month of 2025.

Meanwhile, enquiries for vehicle finance in the January quarter increased by 5.4 per cent year-on-year and overall consumer credit demand rose 8.3 per cent.

The overall number of New Zealand consumers behind on credit payments increased to 491,000 in January, up 20,000 from the previous month, and was equal to 12.6 per cent of the credit-active population

Monika Lacey, pictured, chief operating officer at Centrix, says its latest data shows mortgage and personal loan enquiries remaining strong.

“However, there are still signs of household pressure as personal loan arrears reach the highest level recorded in the past decade – climbing to 10.2 per cent in January, up six per cent year-on-year,” she adds.

“This is also reflected in the financial hardship trends. While overall cases are down year-on-year, personal loan hardships are up 45 per cent year-on-year and now account for 24 per cent of all hardship cases.

“The road to recovery seems to be coming into clearer view, but there are still challenging times ahead as the economy turns a corner.”

Centrix’s report also notes that liquidations increased to 2,952 on a rolling 12-month basis, up 16 per cent year-on-year. January recorded 121 insolvencies and 115 liquidations, the highest January total since 2013. 

The hardest-hit sectors were construction and hospitality, with the number of companies put into liquidation over the past year 758 and 382 respectively.