Vehicle loan arrears improve

Arrears on vehicle loans have made a “significant improvement” in the past year, according to the latest credit indicator report from Centrix.

The proportion of borrowers behind on vehicle loans was 5.2 per cent in July, down from 6.3 per cent in the same month of 2024.

The shift is in contrast to overall arrears, which have risen from 11.1 per cent to 12.4 per cent of the credit active population over the same timeframe.

Centrix notes the number of people behind on payments increased to 480,000 in July, up by 2,000 from the previous month.

The credit bureau also says there was stronger market activity in specialist lending, such as vehicle and personal loans, credit cards and buy-now, pay later, in July with new non-mortgage lending up 11.5 per cent year-on-year.

Keith McLaughlin, managing director, says despite some positive lending trends, financial stress remains elevated, particularly among younger consumers and sole proprietors. 

“Business credit defaults are up eight per cent year-on-year, and company liquidations remain elevated by 26 per cent compared to the same period last year, led by the construction and hospitality sectors,” he adds.

“As we head into spring, there is no doubt that while some indicators are improving, many Kiwi households and businesses continue to face financial challenges.”