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Sixty-Day Delinquency Rate at Lowest Level Since 1999, Says TransUnion

May 31, 2011

CHICAGO, IL — According to TransUnion's quarterly analysis of auto finance trends, the national 60-day auto delinquency rate reached its lowest level since TransUnion began tracking the variable in 1999. For the first quarter of 2011, it stood at 0.49 percent.

On a national level, auto loan delinquencies fell 17 percent from the fourth quarter of 2010 and 25.8 percent from the year-ago quarter.

"Continued improvement in auto delinquencies is a reflection of the stronger auto sales market. As consumer confidence in the economy improves and with auto loan rates remaining at relatively low levels, more people are making auto purchases,” said Peter Turek, automotive vice president in TransUnion’s financial services business unit. “Add to that the fact that consumers with auto loans are making timely payments and we are seeing delinquency rates at record low levels.”

Turek said the record low levels in delinquencies and an the overall competitive landscape has auto lenders now shifting their attention to marketing and growth strategies.

Here’s a breakdown of first quarter auto finance data:

  • Auto Originations:
    • National auto originations experienced a year-over-year increased of 22 percent, marking the fifth consecutive quarter of growth.
    • Demand for auto loans, measured by TransUnion's Auto Inquiry Index, increased by 14.0 percent over the previous year. Forty eight states experienced an increase in their Auto Inquiry Index when compared to the previous year, while Hawaii, the District of Columbia and Tennessee experienced a decrease.
    • States with the steepest quarterly increases in their Auto Inquiry Index were Washington (54.6 percent increase), Alaska (50.0 percent increase) and Vermont (43.9 percent increase).
  • Auto Delinquency Rates:
    • On a state-level basis, 46 states experienced a drop in their quarter-to-quarter delinquency rates, while only two states showed an increase on a year-over-year basis.
    • Auto loan delinquency was highest in Mississippi and Louisiana at 0.97 percent and 0.90 percent, respectively. The lowest auto loan delinquency rates were found in Montana (0.21 percent), the District of Columbia (0.24 percent) and Wyoming (0.27 percent).
    • The largest improvements in delinquency from the previous quarter were found in the District of Columbia (67.6 percent decrease) and Montana (48.8 percent decrease).
    • Auto loan delinquency rates rose in only three states since the fourth quarter of 2010. Alaska increased to 0.61 percent (48.8 percent increase), North Dakota increased to 0.30 percent (25.0 percent increase), and Maine increased to 0.61 percent (17.3 percent increase).

"TransUnion's forecasting models have performed well in tracking the national and state 60-day auto delinquency rates, which are driven by economic factors such as per capita disposable income, consumer confidence, unemployment rates, and demand for motor vehicles,” said Turek. “Despite the current improving economic cycle, the seasonal ups and downs of auto loan delinquency rates — common in the industry — should continue throughout 2011.”

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