Capital-financing firm Aqua Finance, which makes financing tools for commercial and residential loans, said it expects to see an 80% increase in the number of auto loans for the first half of 2018.
That would be an unprecedented pace for the auto industry, where the average loan-to-value ratio has increased from 5.9% in 2016 to 8.5% in 2018.
The firm expects a similar rate of increase in 2019 and 2020, according to the report.
“We expect the average vehicle loan to be $35,000 over the first six months of 2019,” said the report by the research firm.
It expects the average debt to be about $23,000.
The average amount of auto finance for the average borrower will be about a fifth of the total amount that is used in a typical auto loan.
The report comes as Congress grapples with a federal budget impasse that has left many automakers with no funding from the federal government for 2018.
While there have been a number of proposals to reopen the government, the auto financing market has remained largely unchanged since President Donald Trump took office in January.
The market is still very much dependent on private financing.
Aqua says it expects the market to remain stagnant for the foreseeable future.
The company said it will be able to generate revenue from a number “of new business models.”
It also said that it would be able “to provide more meaningful financial information to the consumer.”
A spokeswoman for the National Automobile Dealers Association said the group is “very concerned” about the report and expects it to be ignored by regulators.
“Our members are deeply concerned about what they see as a threat to the safety and stability of the financial industry,” said Lauren R. Hensley, the association’s executive director.
The Federal Reserve, which has the authority to regulate auto finance as a major market, has said it is studying the issue.
“The U.S. Federal Reserve will continue to monitor the impact of the [auto finance] market and take appropriate action, depending on the extent to which regulatory action is warranted,” Fed officials said in a statement.