Vehicle loan demand tumbles

The number of applications for vehicle loans fell by 12 per cent last month, when compared with February a year ago, according to the latest figures from Centrix.

It meant the automotive industry was an outlier for lenders with overall consumer credit demand up by six per cent as the five other credit category types studied increased over the same timeframe.

“This could be attributable to the removal of the clean car discount and subsequent decline in electric vehicle sales,” says Centrix.

Credit card applications were up 15 per cent, buy now, pay later products rose 14.1 per cent and mortgage inquiries rose four per cent.

Centrix’s latest credit indicator report also shows the proportion of vehicle loans in arrears hit six per cent in January, which was an increase of five per cent year-on-year.

It came as the number of Kiwi households behind on credit repayments climbed in January to its highest level since February 2017.

Overall, arrears were up 9.6 per cent year-on-year with the number of consumers behind on payments rising from 439,000 in December 2023 to 480,000 in January.

Keith McLaughlin, pictured, managing director of Centrix, says: “It’s clear the cost-of-living is continuing to impact Kiwi households and businesses across the country.

“There are 480,000 consumers across the country in arrears, although it’s important to note that the majority of reported arrears have only missed one payment and are likely to self-correct.”