TransUnion: Auto Debt Rises Again, Deliquencies Remain Subdued
TransUnion reported this week that auto loan debt per borrow increased for the 11th straight quarter, while delinquencies remained below the fourth quarter average observed between 2007 and 2013.
by Staff
February 27, 2014
2 min to read
CHICAGO — In the fourth quarter, auto loan debt per borrower increased for the 11th straight quarter, rising 4.4% from the year-ago period to $16,769, according to TransUnion. On a quarterly basis, auto loan debt was up from $16,685 in third quarter 2013.
The firm also reported that the 60-day delinquency rate increased from 1.04% in the year-ago quarter and 1.09% in the third quarter 2013 to 1.14%. However, the rate remained below the fourth quarter average observed between 2007 and 2013.
Ad Loading...
"While we observed an uptick in auto loan delinquencies, there are reasons to believe they will continue to remain relatively low in the near future," said Pete Turek, vice president of automotive in TransUnion's financial services business unit. "First, while auto loan originations are increasing at a rapid pace, the percentage of nonprime accounts remains low. In fact, the percentage of nonprime borrowers for all auto loan accounts was lower in the [fourth quarter] than it was the previous year"
The subprime delinquency rate — consumers with a VantageScore of less than 641 on a scale of 501-990 — increased from 5.73% in the fourth quarter 2012 to 6.12%. "While this is nearly a 7% yearly increase, it should be noted that subprime delinquencies remain below levels we observed during the recession," Turek noted.
TransUnion recorded 60.5 million auto loan accounts as of the fourth quarter, up from 57 million in the year-ago quarter. Viewed one quarter in arrears (to ensure all accounts are included in the data), new account originations increased to 6.64 million in Q3 2013, up from 5.99 million in Q3 2012.
The share of nonprime —VantageScore 2.0 credit scores of less than 700 — grew by 16 basis points (from 32.37% in the third quarter 2012 to 32.53% in the third quarter 2013). This percentage is still much lower than what was observed prerecession (36.97% in the third quarter 2007).
"We expect share of nonprime, higher risk loan originations to continue trending upward due to the growth of competitors in this segment," Turek noted.
Ad Loading...
Delinquencies either declined or remained flat from a year ago in 14 states. The largest delinquency declines occurred in Oregon, New Jersey and Delaware, while the largest increases occurred in Michigan, Alaska and Arkansas. Auto loan balances rose in every state between the fourth quarter 2012 to the fourth quarter 2013.
TransUnion is forecasting delinquency rates to drop to 1.02% in the opening quarter of 2014 due to historic seasonality associated with auto financing. "Auto delinquencies tend to drop in the first quarter of the year, and we expect current market conditions will place downward pressure on delinquencies," said Turek.
Talk to F&I customers like you’d talk to a friend, without industry lingo or sales-like questions, and use hard proof to show, not tell, them about a need.
Helping F&I customers understand complementary offerings is likely to lead to more sales, based on the success of a high-performing practitioner of the philosophy.
In this video, Reese Dailey explains how effective follow-up drives better results
across the dealership, including increased sales, higher F&I penetration, and
stronger customer retention.
Deal volume ebbed and flowed throughout 2025, but product performance remained steady, according to automotive technology and data intelligence solutions provider StoneEagle.
A TransUnion study found that relationship-driven sales models proved to be important, as consumers who used an agent had a lower shopping intensity than those going it alone.