According to the most recent quarterly report on household debt and credit, released by the Federal Reserve Bank of New York, more people are taking out loans for cars than homes.
Between April and June, people in the U.S. took on less overall debt compared to the three quarters beforehand, when debt continually increased, according to International Business Times. The debt Americans did take on, though, was mostly in the form of credit card debt, student loans and auto loans.
The amount of debt taken out in the form of auto loans has increased 13 quarters in a row, according to the report. The number of new loans has reached its highest level since 2006, particularly for people with low credit scores, International Business Times reported. In the last quarter, auto loan balances increased to $30 billion, the report stated.
According to the report, auto finance companies, banks and credit unions have all been providing auto loans at roughly the same rate.
There is concern that lenders are providing loans that consumers won't be able to pay back, and which may have higher interest rates than the borrower realizes. The dollar value of loans borrowed for people with credit scores below 660, also known as subprime loans, has doubled since 2009. Loans for people with credit scores above 660 has only increased by half.
As of the most recent quarter, the amount of auto loan debt that is more than 90 days delinquent is about 3.3 percent.
Because of the concern, the federal government began looking into subprime loans earlier this summer. Auto manufacturer and financier GM received a subpoena regarding its subprime auto loans, according to International Business Times. The Department of Justice is concerned GM is violating the Financial Institutions Recovery and Enforcement Act, which was enacted to prohibit acts of fraud.