Demand for car loans climbs

The demand for automotive loans was 8.7 per cent higher in March than in the same month of the previous year, according to new figures from credit bureau Centrix.

The increase helped push overall consumer credit demand up 5.2 per cent year-on-year, which included personal loan and mortgage enquiries rising by 13 per cent and 15.1 per cent respectively.

Tempering the overall figure was credit card demand plunging by 19.1 per cent over the same period and retail energy enquiries falling by 29.2 per cent.

Centrix’s latest credit indicator report also shows household lending in the February quarter recorded a 38.2 per cent year-on-year jump.

“Approved mortgage lending rose 40.1 per cent compared with the same period last year, reflecting the record level of refinancing activity seen in December,” the report says. 

“New non-mortgage lending was also up 15.4 per cent year-on-year, driven largely by unsecured personal loans and stronger auto finance activity. 

“The latest data also shows conversion rates for mortgages, personal loans, and auto lending have continued to improve.”

As for vehicle loan arrears, these improved to 5.6 per cent of active credit accounts in February.

Total consumer arrears among New Zealand borrowers fell to 12.09 per cent in February, down from 12.56 per cent in January and 2.4% lower than a year ago. 

This meant the number of people behind on payments declined to 473,000, down 18,000 from January this year. 

“This reflects improved financial resilience among many households compared with a year ago,” comments Centrix. 

“However, 97,000 consumers are now 90-plus days in arrears, the highest level since July 2023, showing some households remain under sustained financial pressure.”

Monika Lacey, chief operating officer at Centrix, notes the latest data shows the credit environment has been stabilising in recent months but global uncertainty amid conflict in the Middle East has now added uncertainty to the economic outlook.

“Although these developments are too recent to be fully reflected in the latest credit data, they are a reminder external shocks can impact household and business costs,” she adds

“Overall, the latest data points to a stabilising environment. However, with pockets of household pressure still evident and global cost risks back in focus, it remains important for households and businesses under strain to seek trusted financial advice early.”