Vehicle arrears climbing

Arrears on vehicle loans have continued to increase and hit 5.5 per cent in January, which was up from 5.3 per cent in December 2022, according to new figures from credit bureau Centrix.

The latest credit indicator report from the company also shows how New Zealand households are feeling the pressure, with consumer arrears rising to 11.9 per cent of the active credit population.

Centrix says about 430,000 Kiwis are behind on their repayments, a 20,000 increase from December 2022, with 4.8 per cent of credit-active consumers currently 30-plus days past due. The latter figure was up from 4.4 per cent in January 2022. 

The report also shows the demand for automotive loans has increased 0.8 per cent year on year.

Keith McLaughlin, pictured, managing director of Centrix, says the latest credit insights show arrears rates climbing across the board. 

“We’re seeing arrears on mortgages, unsecured personal loans, credit cards and buy now, pay later accounts climb, which demonstrates the financial challenges facing many households in New Zealand,” he explains. 

“Vehicle arrears are also on the rise, which – alongside rising mortgage arrears – are often a key indicator of financial strain.”

Centrix notes that while the arrears cycle tends to peak post-Christmas, the current level is six per cent higher compared to the same time a year ago “as economic conditions continue to deteriorate”.

“Although the increasing arrears rates are concerning and something to keep a close eye one, it is important to point out that we are still below pre-pandemic levels,” it adds.