Consumers Taking On Debt For Cars? I Don't Think So

http://www.hsdent.com/blog/Consumers_Taking_On_Debt_For_Cars_I_Dont_Think_So


Extract from above link
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The story goes that consumer credit continues to contract.  Overall, the numbers went from $2,478 billion, in 2009, to $2,434 billion in 2010, and $2,433 billion in January 2011.  We are spending less and saving more.  This falls right in line with what we have been forecasting.  Looking further, the government splits the overall credit number into two parts - revolving (mostly credit cards) and non-revolving (installment loans, like autos).  Revolving credit has been falling for years, registering $894 b, $825 b, and $806 b in 2009, 2010, and Jan 2011 respectively.  In fact, revolving consumer credit has fallen 28 of the last 29 months, up only in December of 2010 before falling back again in January 2011.  Non revolving credit (installment loans, etc.) has fallen from its peak, but appears to be rebounding some.  This category registered $1,584 b and $1,608 b in 2009 and 2010, moving up to $1,627 in January 2011.  From Dec 2009, we have seen $43 billion added in non-revolving credit.  Because auto loans are in this category, many are assuming that new car sales are the reason for the increase.  That's not the case.

Federal government backed student loans exploded from $186 b in 2009 to $317 b in 2010, and up again to $342 b in January 2011.  This leap of $160 billion from 2009 to January 2011 is almost 4 times the size of the overall increase in non-revolving credit, which means that other areas of non-revolving credit have decreased by almost $120 billion in the same time frame.