Schaumburg, Ill., — Automotive loans 60 days past due rose by nearly 17 percent from the fourth quarter
2007 to the fourth quarter 2008, according Experian Automotive.
During its quarterly State of the
Auto Finance Market Webinar, Experian Automotive presented its latest analysis
of automotive lending trends, providing a comprehensive view of the market from
fourth quarter 2007 through fourth quarter 2008.
Currently, 1.04 percent of all
automotive loans are 60 days past due, compared with 0.89 percent in the fourth
quarter 2007. Thirty-day delinquencies rose 9.87 percent over the same period,
to 3.06 percent in fourth quarter 2008 from 2.78 percent in fourth quarter
2007. Combined, 30- and 60-day delinquencies accounted for nearly $29 billion in at-risk loans.
“There continues to be a steep climb
in the number of people past due on their auto loans, which causes a negative
ripple through the industry,” said Scott Waldron, president of Experian
Automotive. “As more loans become delinquent, lenders begin to tighten their
criteria for automotive lending. Ultimately, this makes it more challenging for
consumers to find funding when they want to buy a car or truck and more difficult
for dealers to help consumers secure financing.”
According to Experian’s Scorex PLUS,
the average loan score for a new vehicle loan was 765 in the fourth quarter of
2008, 12 points higher than the average credit score for a new vehicle loan in
the fourth quarter of 2007. Although the average loan score for new loan
originations rose — largely due to more stringent loan criteria from lenders —
overall consumer credit worsened. The percentage of all outstanding loans to
prime customers (680 credit score and above) fell by nearly 1.5 percentage
points, from 57.97 percent in the fourth quarter of 2007 to 56.5 percent in the
fourth quarter of 2008.
“The overall drop in consumer
credit, combined with lenders’ tightening of loan criteria, is making it more
difficult for auto retailers to find financing for their potential customers,”
said Melinda Zabritski, director of automotive credit for Experian Automotive.
“However, there are still financing sources out there if retailers know where
to look. They need to develop a better understanding of lenders in their market
and find out who has programs for various credit levels.”
Experian’s other findings from
fourth quarter 2008 data include:
• Delinquencies
are highest in the Southeast, as Mississippi, Alabama, Georgia
and South Carolina have four of the five highest 30-day delinquency rates. The District of Columbia is second.
• The
states with the lowest 30-day delinquency rates are North
Dakota, Arkansas, South Dakota, Montana
and Wyoming.
• The
average loan for a new vehicle was $24,444 in the fourth quarter of 2008, down
$338 from the first quarter of 2008 ($24,782).
• The
average loan for a used vehicle was $15,904 in the fourth quarter of 2008, down
$678 from the first quarter of 2008 ($16,582).
• From
the first quarter to the fourth quarter of 2008, small economy cars and
entry-level SUVs saw significant increases in prime loan market share, up 29.4
percent and 24.2 percent, respectively. For the same time period, prime loans
for full-sized pickup trucks and large SUVs saw decreases of 17.31 percent and
13.01 percent, respectively.