Demand for car loans increases

The number of vehicle-loan enquiries has increased by 4.7 per cent from a year ago on a three-month rolling basis, according to new figures from Centrix.

The company’s October credit indicator report shows demand for mortgages and credit cards also rose 14.4 per cent and 9.5 per cent respectively over the same period, despite overall consumer finance enquiries falling by 4.9 per cent.

Overall household lending in the September quarter was down 14 per cent year-on-year, with non-mortgage lending unchanged and vehicle finance providing much of the support for activity. 

The proportion of credit-active consumers in arrears increased slightly to 10.88 per cent in September, from 10.74 per cent in August, with 430,000 people behind on payments. 

However, Centrix says the arrears rate remains 9.3 per cent lower than a year ago. 

The report shows there were 81,000 consumers who were 90-plus days past due, highlighting continued pressure among borrowers experiencing more persistent repayment difficulties. 

Vehicle loan arrears fell to 5.2 per cent of borrowers but remained above the 5.1 per cent recorded a year earlier. 

Monika Lacey, pictured, Centrix chief operating officer, says: “While the improvement in consumer arrears is encouraging, rising hardship and business failures show that financial pressure has not eased for everyone. 

“With borrowing costs remaining elevated, households and businesses concerned about meeting repayments should speak with their lender or a trusted financial adviser early to understand their options.”