When you have a record year for car sales such as what happened in 2014, you can also expect a record number of auto-loans. Credit reporting bureau Experian says that Americans borrowed a staggering $886 billion dollars last year to finance new and pre-owned vehicles, but they maintain this is no cause for alarm.

Experian mirrors what Equifax has already said about the possibility of a so-called sub-prime bubble. That is, despite the massive increase in lending, there has been a relatively small growth in sub-prime and deep sup-prime borrowers, which up 3.83 percent and 5.60 percent, respectively. However, the total market share of sub-prime and deep sub-prime loans actually fell by twenty percent.

"Whenever there is an uptick in the number of loans to subprime and deep-subprime customers, there is the potential for a 'sky is falling' type of reaction...The reality is we are looking at a remarkably stable automotive-loan market, in part because consumers are continuing to stay on top of their payments. With that said, keeping an eye on consumer payment behavior and the lending community's appetite for risk is important because these types of insights help the industry make better decisions that may affect loan terms or interest rates in the future." - Melinda Zabritski, Experian's director of automotive finance. "

It is important to note that an "outstanding loan" is simply a car note that is yet to be paid off. While my partner Tavarish recommends only paying cash for used cars, I bet many of you are making payments on a new or pre-owned vehicle. That is fine as long as you can handle your budget. So the number of outstanding loans should raise any flags, but when folks can't pay and get into delinquent status, that can spell trouble for the industry.

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The good news on this front is that 30 and 60 day delinquencies have remained relatively flat compared to last year. Thirty day delinquencies only rose a fraction of a percent from 2.61 percent to 2.62 percent, while sixty day delinquencies actually fell from 0.73 percent 0.72 percent. What these numbers mean is that the vast majority of buyers are paying their loans on time. Of course this could be a result in the increased availability of longer loan terms such as 72 and even 84 month financing, as these put less of a strain on the monthly budget.

(H/T to Autoblog)

If you have a question, a tip, or something you would like to to share about car-buying, drop me a line at AutomatchConsulting@gmail.com and be sure to include your Kinja handle.