Auto loan delinquencies fall to lowest rate on record
Pity the repo man.
The national auto loan delinquency rate -- the share of borrowers 60 or more days past due on their payments -- hit its lowest level since credit report agency TransUnion began tracking the data in 1999 and is down 25% from a year earlier.
The delinquency rate during the second quarter of this year dropped to 0.33% from 0.36% in the first quarter.
“It’s not surprising that auto loan delinquencies remain at record low levels,” said Peter Turek, automotive vice president in TransUnion’s financial services business unit. “Consumers now value their auto loans more than their credit cards and mortgages. This is partly due to the need for transportation to get to work or to seek employment in a difficult job market.”
TransUnion found that California’s auto loan delinquency rate was 0.37% in the second quarter, slightly higher than the national average but a big dip from the 0.52% of the same period a year earlier. The average auto debt-per-borrower is $14,572 in California, which is the 10th-highest auto debt nationwide.
Louisiana, Mississippi and Oklahoma had the highest delinquency rates, all in the 0.55% to 0.60% range.
Through the first seven months of this year, U.S. auto sales have risen 14% to 8.4 million vehicles. Analysts and automakers attribute a portion of the increase to easing credit conditions that have helped “subprime” buyers, those with less than perfect credit, finance purchases. That trend could reverse the decline in delinquency rates, according to TransUnion.
“With the increase in non-prime borrowing, we do anticipate that auto loan delinquencies will begin to increase,” said Turek. “We are at such a low auto loan delinquency level -- far from normal standards -- that a slight rise through the end of the year should be expected, though the overall rate will likely remain relatively low.”
ALSO:
Collector car auctions set record
Baroness defies Nazis to save Mercedes
Bieber, DiCaprio Fisker Karmas are recalled
Follow me on Twitter (@LATimesJerry), Facebook and Google+.
