Car loan demand tumbles

The demand for vehicle loans has taken another tumble after the number of applications dropped by 22 per cent in July, when compared with the same month a year ago.

Centrix highlights the figure in its latest credit indicator report, which was published on September 3, and says the fall is due to the continued decline in new car sales.

It comes after the credit bureau also reported demand for automotive finance in June fell by 23.7 year-on-year.

Overall consumer credit demand was down by three per cent year-on-year in July, with the other categories reporting less demand being mortgages and personal loans after falling by 1.5 per cent and 1.4 per cent respectively.

The number of people behind on loan payments eased to 456,000 in July, down 9,000 month-on-month, and was the equivalent of 12.25 per cent of the credit active population.

Keith McLaughlin, Centrix managing director, says: “It’s clear Kiwis are still struggling in the face of the ongoing cost-of-living crisis, with financial hardship cases up 27 per cent, sitting at 13,850 for July. 

“In saying this, it is positive to see so many consumers taking responsible steps to deal with their financial struggles before they find themselves in a bad debt emergency.”