Experian: 60-Day Loan Delinquencies Rise in 22 States
While 60-day automotive loan delinquencies fell nationally, 22 states experienced increases. The sharpest increase occurred in Delaware, where delinquencies jumped by nearly 10%.
SCHAUMBURG, Ill. — While 60-day automotive loan delinquencies fell 1.7% at a national level in the opening quarter of 2014, 22 states showed increases, according to a report from Experian Automotive.
Delaware showed the sharpest increase, jumping by nearly 10% from 0.73% of open automotive loans in the first quarter of 2013. Rounding out the Top 5 states with the biggest increase in 60-day delinquencies include:
Montana, which increased 8.9% from 0.35% in the first quarter 2013.
Nebraska, which increased 7.9% from 0.45% in the first quarter 2013
Iowa, which increased 6.6% from 0.39% in the first quarter 2013
New Jersey, which increased 5.8% from 0.61% in the first quarter 2013
Thirty-day auto delinquencies dropped 5% from a year ago to 2.24% of open automotive loans in the first quarter of 2014. Additionally, only six states showed an increase in 30-day delinquencies:
Alaska, which increased 8.9% from 1.48% in the first quarter 2013
Montana, which increased 5.4% from 1.48% in the first quarter 2013.
Kentucky, which increased 3.4% from 2.27% in the first quarter 2013.
West Virginia, which increased 2.2% from 2.55% in first quarter 2013.
Indiana, which increased 1.7% from 2.06% in the first quarter 2013.
Pennsylvania, which increased by 0.9% (up from 2.04% in first quarter 2013)
“Consumers overall are doing a better job of paying their auto loans on time. However, it is evident that consumers in some states still are struggling to meet their payment obligations,” said Melinda Zabritski, Experian’s senior director of automotive credit. “It is important for consumers to keep in mind that paying bills on time is one of the most essential factors when lenders are evaluating who gets the best rates and terms when applying for a future loan.
“While the subprime auto loan market continued to grow in Q1 and credit-challenged consumers have been able to get financed more easily, a rise in overall delinquencies could cause lenders to tighten their credit standards, ultimately lessening access to credit in the future,” Zabritski warned.
Other findings from the report showed that repossessions were up 36.5% overall in the first quarter, increasing from 0.5% one year ago to 0.68%. However, the increase was driven entirely by finance companies that provide a significant majority of their loans to credit-challenged customers. In the first quarter, repossession rates for finance companies jumped 69.1%, from a year ago to 3.01%.
The report also found that total dollar volume for automotive loans was $811.3 billion, the highest since Experian Automotive began publically tracking loan volumes in 2006. Additionally, all lender types experienced growth in year-over-year quarterly loan volume, with banks up by $33 billion, credit unions up by $23 billion, finance companies up by $19 billion and captive finance companies up by $9 billion.
Additionally, the average charge-off amount for loans gone bad jumped from $7,401 in the first quarter 2013 to $8,541 in the opening quarter of 2014.
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