Auto Loan 60-Day Delinquency Rate Near Record Low

Auto Loan 60-Day Late-Pay Rate Near Record LowNot only are auto loan balances at their highest level in four years, but more borrowers than ever (almost) are making these payments on time.
The national auto-loan delinquency rate (the ratio of borrowers 60 or more days past due) remained near its all-time low in the fourth quarter of 2012, according to a report by the credit-reporting bureau TransUnion. The record low was set in the second quarter of 2012.
The late-pay rated ended the year at 0.41 percent. The rate rose from 0.38 percent in the third quarter of 2012, but it has dropped five basis points from the end of 2011 when the delinquency rate was 0.46 percent.
The other trend is growing balances. TransUnion reports that bank auto debt per borrower rose for the seventh straight quarter, increasing 5.4 percent from $13,045 in fourth quarter of 2011 to $13,747 in fourth quarter of 2012.
“As expected auto loan delinquencies rose slightly in the fourth quarter, though they remain near the all-time record low set in the second quarter of 2012,” said Peter Turek, automotive vice president in TransUnion’s financial services business unit. “We continue to see increasing auto debt per borrower as the new and used car sales market remains relatively strong.”
Between the third quarter of 2012 and fourth quarter of 2012, more than half of states (28) saw increases in their auto delinquency rates.
However, on a year-over-year basis only 14 states experienced increases in their auto delinquency rates. On a more local level, 52.5 percent of metropolitan areas saw decreases in their auto delinquency rates between the fourth quarter of 2011 and the fourth quarter of 2012.
TransUnion’s analysis also found that auto loan originations continue to increase. Total new auto loan and lease originations in the third quarter of 2012 grew by about 15.8 percent, relative to the same period last year.
Auto loan originations are analyzed one quarter in arrears, to account for the reporting lag of new accounts.
The share of non-prime, higher-risk consumers (with a VantageScore credit score lower than 700 on a scale of 501-990) was 32.4 percent.  This is somewhat higher than one year ago (30.6 percent in the third quarter of 2011), and is significantly higher than the 27.6 percent seen in the third quarter of 2010.

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