US banks' and credit unions' auto loan delinquency ratios reached their highest levels of any second quarter since 2013, after rising year over year in the last 10 quarters.

In line with seasonal trends, the bank industry's auto loan delinquency ratio ticked back up to 3.08% during the second quarter after a decline in the first quarter, according to S&P Global Market Intelligence data. In comparison, the ratio was 2.74% in the second quarter of 2023. At the same time, the industry's total delinquent auto loans rose to $15.98 billion in the second quarter from $14.86 billion in the year-ago quarter.

Auto loan delinquency ratios followed a similar trend at US credit unions, rising sequentially to 2.62% from 2.49% for used vehicles and to 1.45% from 1.37% for new vehicles. Both ratios were also up on a year-over-year basis. Meanwhile, total delinquent loans rose sequentially to $8.49 billion from $8.08 billion for used vehicles and to $2.47 billion from $2.36 billion for new vehicles.

Total auto loans at US banks fell for the seventh consecutive quarter to $518.36 billion, the lowest level since June 30, 2021. As for credit unions, used vehicle loans increased slightly to $324.25 billion during the second quarter from $324.04 billion in the previous quarter while new vehicle loans fell to $170.69 billion from $172.70 billion. Used vehicle loans were still down 0.03% from the year-ago quarter and new vehicle loans were down 4.3%.

– Access an industry document detailing auto loan holdings at US banks and credit unions. – View US industry data for commercial banks, savings banks and savings and loan associations.

Top bank auto lenders

As auto loan delinquency ratios ticked up for banks and credit unions, most of the top auto lenders in both categories aligned with the industry trend and had higher delinquency ratios on an annualized basis. Twenty-two of the top 25 bank auto lenders reported year-over-year increases in their delinquency ratios.

With an auto loan delinquency ratio of 12.35%, Santander Holdings USA Inc. again had the highest ratio among the top 25 banks by auto loans with the company's delinquency ratio increasing 144 basis points from the year-ago quarter. OFG Bancorp also made a repeat appearance, again posting the second-highest delinquency ratio at 7.04% after a year-over-year increase of 85 basis points.

Fifteen of the top 25 US bank auto lenders posted sequential auto loan growth during the quarter while 10 recorded quarter-over-quarter declines. At the same time, 14 posted year-over-year declines.

Capital One Financial Corp. remained the top auto lender among US banks with $74.39 billion in total auto loans, while Ally Financial Inc. again held the second-largest auto loan portfolio at $73.71 billion. Capital One posted faster loan growth than Ally during the quarter, expanding its lead to $678.1 million from $345.6 million in the previous quarter.

Top credit union auto lenders

On the credit union side, only two of the top 25 auto lenders reported year-over-year decreases in their auto loan delinquency ratios.

Langley FCU had the highest delinquency ratio at 4.58% following a 109-basis-point increase year over year, while Citizens Equity First CU had the second-highest at 4.38% after a 68-basis-point increase.

Twelve of the top 25 credit unions by auto loans posted a sequential increase in their portfolios. Pentagon FCU reported the largest sequential decline in auto loans at 6.3%, while Mountain America FCU reported the largest sequential increase at 3.8%.

Navy FCU had the largest auto portfolio as of June 30, at $31.37 billion, well above America First FCU in the second spot with $7.10 billion in auto loans.

America First was, however, the top credit union lender in terms of indirect auto loans, with a total of $5.20 billion followed by Golden 1 CU with a total of $4.62 billion.

Six of the top 25 credit unions by indirect auto loans reported sequential declines in indirect auto loans as a percentage of their total auto loans, while 19 reported sequential increases. Rally CU reported the largest decline at 65 basis points, while Golden 1 CU reported the largest increase at 116 basis points.