TransUnion: Delinquencies Fall for the Seventh Straight Quarter
The national 60-day delinquency rate for auto loans fell for the seventh consecutive quarter, dropping to 0.44 percent at the end of the second quarter, TransUnion reported today.
The national 60-day delinquency rate for auto loans fell for the seventh consecutive quarter, dropping to 0.44 percent at the end of the second quarter, TransUnion reported today. The credit bureau, however, did note a moderate deceleration of the delinquency rate since the third quarter of last year.
On a quarter-over-quarter basis, the rate declined 10.20 percent. On a year-over-year basis, the rate declined 16.98 percent, as 60-day delinquencies continue to remain at historically low levels.
"Historically, first and second quarter auto delinquencies tend to be lower than those experienced in the second half of the year," said Peter Turek, automotive vice president in TransUnion's financial services business unit. "However, over the last seven quarters ─ on a year-over-year basis ─ we have seen delinquencies trend downward as consumers continue to pay down debt.”
Turek partly attributed the quarter-over-quarter decrease to seasonal influences. He added that improving sales during those two quarters also has helped, as the more consumer open auto loans, the more downward pressure is placed on delinquency rates. Also helping to keep rates down are low interest rates, which has made monthly payments more affordable.
Between the first and second quarters of 2011, 43 states experienced declines in their auto delinquency rates. On a more granular level, 60 percent of metropolitan statistical areas (MSA) saw declines in their delinquency rates last quarter. During the first quarter of 2011, 64 percent of MSAs experienced a decline in auto delinquency rates compared to only 49 percent in the fourth quarter of 2010.
"Today, national auto delinquency rates are at historic lows, at half the levels found in credit card nonpayment rates and over 10 times lower than seen in the mortgage sector," Turek said. "Lenders that have money to lend are attracted to auto finance as it is a relatively low risk short-term asset and auto loan delinquencies are expected to remain at historically low levels through the end of the year. Consumers should benefit in the form of competitive offers, making purchase decisions easier and more affordable."
More Auto Finance
Dealerships Are Paying the Price for Extended Car Loans
Growing negative-equity scenarios mean such lengthy terms should be addressed in a forward-looking way to make them work for the dealer and the consumer down the road.
Read More →
Trade-Ins in Negative Equity Reach New Heights
As such trade-ins rise in frequency, so do monthly loan payment amounts and interest rates, according to second-quarter data compiled by Edmunds.
Read More →
Auto Credit Plentiful
June numbers show lenders are readily granting access, including to risky borrowers, as consumers leverage themselves to take on high prices.
Read More →
Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →
Porsche Financial Services Shifts Structure
After 36 years with Porsche, the Financial Services Chief Financial Officer Konrad Riedl is retiring, and the department is realigning its management structure.
Read More →
Tariffs Could Raise Insurance Premiums
As U.S. import tariffs affect repair costs, consumers might find it more affordable to replace a damaged vehicle, according to recent Insurify tariff analysis.
Read More →
Smaller Loans, Longer Terms
The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.
Read More →
New Cars a Tad More Affordable
May averages show that combined circumstances gave auto consumers slightly better buying power for the month, though average prices were up year-over-year.
Read More →
First-Quarter Sees Long Auto Loan Growth
Experian data show more consumers are tapping the method, along with refinancings, to afford buying. Meanwhile, subprime borrowers are getting more access.
Read More →
Mastering Credit Friction
In this video, Josh Krach explains how to turn credit friction into an advantage.
Read More →