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TransUnion: Auto Delinquencies Fall to Record Low for Second Straight Quarter

August 21, 2012

CHICAGO — For the second consecutive quarter, the national auto loan delinquency rate hit its lowest level since TransUnion began tracking the data in 1999.

Auto loan delinquency rates in the second quarter dropped to 0.33 percent, down from 0.36 percent the first quarter. On a year-over-year basis, auto loan delinquencies declined 25 percent from 0.44 percent in the second quarter 2011, according to TransUnion.

"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. "A recent TransUnion study found that 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.

“Additionally, consumers with car loans have more equity in their vehicle than they have in the recent past because of the strong used car vehicle market. Consumers want to keep their auto loan relationships in good standing,” he added.

In addition to increased demand in new and used autos, bank auto debt per borrower has risen nearly 6 percent from $12,689 in the second quarter 2011 to $13,427 in the recent quarter. Despite growing bank auto debt, the majority of states and cities are experiencing declines in their auto loan delinquency rates.

Between the first and second quarter of this year, 37 states experienced declines in their auto delinquency rates. On a more granular level, 58 percent of metropolitan areas realized decreases in their auto delinquency rates in the second quarter. This is down from the prior period where 66 percent of MSAs experienced decreases.

"It's impressive to see auto loan delinquencies remain so low despite a growing proportion of new loans going to non-prime consumers," Turek added.

On a year-over-year basis, the percentage of new auto loans made to nonprime borrowers (with a VantageScore credit score lower than 700 on a scale of 501-990) in the second quarter increased by 9 percent. In the last two years (between Q2 2010 and Q2 2012), the percentage of new auto loans to nonprime borrowers has increased more than 20 percent.

"With the increase in non-prime borrowing, we do anticipate that auto loan delinquencies will begin to increase," Turek said. "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."

Q2 2012 Bank Auto Statistics - Delinquency Rates

Quarter over Quarter

 

Q1 2012

 

 

Q2 2012

 

 

Pct. Change

 

 

USA

 

0.36

%

 

0.33

%

 

(8.33

%)

 

 

 

 

 

 

 

 

 

 

Year over year

 

Q2 2011

 

 

Q2 2012

 

 

Pct. Change

 

 

USA

 

0.44

%

 

0.33

%

 

(25.00

%)

 

 

 

 

 

 

 

Highest Bank Auto Delinquency States

Q2 2012

 

 

Louisiana

0.60

%

 

Mississippi

0.60

%

 

Oklahoma

0.55

%

 

 

 

Bank Auto Delinquency in Key States

Q2 2012

 

 

California

0.37

%

 

Florida

0.41

%

 

Illinois

0.39

%

 

Michigan

0.21

%

 

New York

0.30

%

 

Texas

0.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Top 3 Year-over-Year Increases

 

Q2 2011

 

 

Q2 2012

 

 

Pct. Change

 

 

Delaware

 

0.31

%

 

0.45

%

 

45.16

%

 

Idaho

 

0.19

%

 

0.26

%

 

36.84

%

 

Montana

 

0.24

%

 

0.25

%

 

4.17

%

Q2 2012 Bank Auto Statistics - Bank Auto Debt Per Borrower

Quarter over Quarter

 

Q1 2012

 

Q2 2012

 

Pct. Change

 

 

USA

 

$

13,272

 

$

13,427

 

1.17

%

 

 

 

 

 

 

 

 

 

 

Year over Year

 

 

Q2 2011

 

 

Q2 2012

 

Pct. Change

 

 

USA

 

$

12,689

 

$

13,427

 

5.82

%

 

 

 

 

 

 

 

Highest Bank Auto Debt Per Borrower

 

Q2 2012

 

Texas

 

$

15,232

 

Louisiana

 

$

14,973

 

Alabama

 

$

14,960

 

 

 

 

Lowest Bank Auto Debt Per Borrower

 

 

Q2 2012

 

Nebraska

 

$

11,614

 

Ohio

 

$

11,965

 

Kansas

 

$

12,154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Top 3 Year-over-Year Increases

 

Q2 2011

 

Q2 2012

 

Pct. Change

 

 

Oregon

 

$

11,788

 

$

13,094

 

11.07

%

 

Louisiana

 

$

13,662

 

$

14,973

 

9.60

%

 

Idaho

 

$

11,382

 

$

12,471

 

9.57

%

 

 

 

 

 

 

 

 

 

 

Top 3 Year-over-Year Declines

 

 

Q2 2011

 

 

Q2 2012

 

Pct. Change

 

 

New Jersey

 

$

13,953

 

$

13,888

 

(0.46

%)

 

Hawaii

 

$

14,658

 

$

14,615

 

(0.29

%)

Note: Only two states experienced year-over-year declines

 

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