By Jerry Hirsch
7:00 AM PST, December 18, 2012
People are borrowing more money per car purchase, but they are paying the vehicles off reliably, pushing the national auto loan delinquency to near a record low.
"It’s a real sign that the automobile market is on solid footing that even with more non-prime consumers carrying auto loan balances, we've continued to maintain a low national auto loan delinquency rate," said Peter Turek, automotive vice president in TransUnion's financial services business unit.
"We believe this is happening partly because consumers are now valuing their auto loans even more than their credit card and mortgage loans; also, lenders and dealers are putting even more emphasis on placing buyers in vehicles and loans that best fit their financial situation," Turek said.
The national auto loan delinquency rate is expected to rise slightly from 0.36% at the end of 2012 to 0.37% by the end of next year, but the level has dropped more than 50% since reaching 0.86%, its peak in the fourth quarter of 2008, according to TransUnion’s national consumer credit database.
Consumers in Mississippi, Louisiana and West Virginia have the most auto loan borrowers that are 60 days past due, with rates ranging at 0.88% for Mississippi and Louisiana and .70% for West Virginia during the current quarter.
Montana, Alaska and Minnesota have the lowest delinquency rates at 0.13%, 0.17% and 0.23%, respectively.
California’s delinquency rate was 0.39% in the third quarter, compared with 0.62% in the third quarter of last year. That represented one of the largest declines nationally.
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