Low Interest Rates Cause Increase In Car Loans In Washington DC
SNL financial reported that the low interest rates have seen a nasty growth in car loans in Washington DC as some of the leading auto lenders increased their portfolios during the months of 2011 to a total of 3 percent to nearly $31.5 billion.
The regulators started requiring banks to disclose auto loans during the first quarter of the previous year which is the reason why there is no data available for the annual comparison.
The portfolio for Capital One Financial Corp. accounted nearly 70 percent of the entire auto loans within the reviewed group.
However the McLean-based institution registered a 6.6 percent growth during the third quarter of last year to nearly $21.7 billion during the fourth quarter. Dominating the ranks were the renowned credit unions although they posted mixed quarterly results.
The Vienna-based Navy Federal credit union for example, reported 0.5 % decline during the last three months but it still registered a 4 % increase to approximately $5.6 billion for the same year.
Some of the largest results in auto loans were observed at NASA Federal Credit Union in Upper Marlboro as it recorded a surprising 32.7 % increase for the quarter along with an 25 % jump for the same year.
On the other hand Apple Federal Credit Union Fairfax, VA based grew its scores of auto loans to 18.5 % during the fourth quarter and 26% for the same year. Auto lending was observed to be flat year over year at Virginia Heritage Bank in Vienna although during the last three months of 2011 it saw an increase of 12.8 % to nearly $65.8 %.
Charles C. Brockett the Chief operating officer said that the supply chain disturbance that was caused by the floods in Thailand and earthquake in Japan tempered loan growth.
He further mentioned that they still do a fair amount of import financing so that such natural disasters that result in slower pace of lending that anticipated. He added, the impetus from the fourth quarter was quite strong and that they are also seeing it continue into 2012 as well.
However the consumer demand for cars was quite apparent during the February retail sales from the commerce department as it showed a 1.7 % increase over the last year to nearly $70.5 billion in sales. Fortunately analysts foresee continued purchase throughout the year if the interest rates on auto loans continue to stay down.