韩国主要资本公司汽车分期贷款逾期率上升，商用车和工程机械融资压力加重

Delinquency rates are rising at major South Korean capital firms that provide auto installment financing. Prolonged high interest rates have increased borrowers' principal and interest repayment burdens, and with the construction downturn persisting, warning signs are emerging not only in auto financing but also in commercial vehicle and construction equipment lending.
JB Woori Capital's installment financing delinquency rate stood at 3.62% at the end of June this year, up 0.91 percentage points from 2.71% at the end of last year, according to financial industry sources on the 31st. That is also 0.78 percentage points higher than the 2.84% recorded at the end of 2024. The installment financing delinquency rate far exceeded the firm's overall delinquency rate of 2.69% and was higher than that of other financial assets such as loans and leases.
Installment financing is a product in which a financial company pays a seller on behalf of a consumer purchasing goods such as a vehicle or machinery, with the consumer repaying the principal and interest over a set period. It is one of the core businesses of capital firms and is largely concentrated in auto financing. Of the 47.2014 trillion won in total outstanding installment financing at the end of last year, auto financing accounted for 45.7704 trillion won, or about 97%, according to the Credit Finance Association.
Other capital firms show a similar trend. KB Capital's installment financing delinquency rate was 1.97% at the end of June, up 0.83 percentage points from 1.14% at the end of last year. That slightly exceeded its overall delinquency rate of 1.93% and was higher than its lease delinquency rate of 1.20%. At Woori Financial Capital, the installment financing delinquency rate rose to 1.26% at the end of June from 1.12% at the end of last year, a gain of 0.42 percentage points from 0.84% at the end of 2024. Hana Capital's rate of 0.96% at the end of June was slightly lower than 0.99% at the end of last year, but roughly three times the 0.35% recorded at the end of 2022.
High interest rates and slowing growth have eroded borrowers' capacity to repay, cited as the main driver of the increase. Used-car financing is particularly exposed, given the higher share of borrowers with weaker credit profiles, making it more vulnerable to rate increases or an economic downturn. Korea Ratings said of JB Woori Capital that "the credit quality of borrowers for products such as used-car financing is inferior, leaving sensitivity to interest rates and the economy at a high level," adding that "given rising market rates and the trend of economic polarization, downward pressure on asset quality is expected to persist."
The presence of a considerable number of multiple-debt borrowers among installment financing customers is another factor adding to asset quality strains. An official at one capital firm said, "Among borrowers using installment financing, quite a few take out additional loans such as unsecured personal loans," adding that "if high interest rates increase the repayment burden on those other loans and delinquencies occur, installment financing can be affected as well."
The increase is even more pronounced in commercial vehicle and construction equipment financing, which is directly tied to construction and transport activity. When a weak economy reduces work in those industries, borrowers' incomes fall and so does their ability to make installment payments.
According to data that the office of Rep. Kim Sang-hoon of the People Power Party obtained from five firms — Hyundai, Hana, Woori Financial, JB Woori and Meritz Capital — their combined commercial vehicle installment financing delinquency rate was 0.72% at the end of May this year, up 0.18 percentage points from 0.54% at the end of last year. Commercial vehicle financing covers lending for vehicles used mainly at transport and construction sites, including cargo trucks, dump trucks and concrete mixers.
The rise in construction equipment installment financing was steeper. The five firms' delinquency rate for such lending was 1.43% at the end of May, up 0.32 percentage points from 1.11% at the end of last year. That is more than three times the 0.43% recorded at the end of 2024. New construction equipment installment financing at the five firms runs 60 billion to 70 billion won a year, a smaller market than commercial vehicle installment financing at around 1 trillion won, yet the delinquency rate is higher.
An industry official said, "For commercial vehicle and construction equipment installment lending, asset quality inevitably weakens as construction conditions worsen," adding that "with the construction slump and high oil prices continuing, the delinquency burden appears to be growing."