Demand for car loans falls

The level of demand for vehicle loans remains down 5.6 per cent year-on-year, while applications for mortgages and credit cards have recorded double-digit increases, according to the latest data from Centrix.

A comparison of rolling averages for the three months to the end of January reveals overall consumer credit demand has remained stable year-to-date and decreased 0.5 per cent from the same period a year ago.

While the latest level of interest in vehicle loans continues a run of decreases, the demand for mortgages was up 11 per cent and for credit cards it rose 24 per cent.

Personal loans and retail energy credit rose 0.4 per cent and 16.4 per cent respectively, but applications for buy now, pay later products dropped 4.5 per cent.

Centrix’s latest credit indicator report also shows the number of people behind on credit repayments climbed 21,000 month-on-month to 491,000 in January.

It notes the current arrears rate is three per cent lower than a year ago, marking the first year-on-year improvement since December 2021. 

The number of consumers who are 30-plus days in arrears improved by 7.4 per cent year-on-year, 

The report does not provide a breakdown of the proportion of vehicle loans in arrears. However, it notes mortgage arrears hit the highest level in eight years last month when 23,700 home loans were reported past due, a six per cent increase year-on-year

Keith McLaughlin, managing director of Centrix, says the economic climate remains challenging and uncertain for many households and businesses across New Zealand.