Auto Delinquency Soars in Q1
S&P Global Mobility reports auto loan delinquency exceeded recession-era highs in the first quarter.
S&P Global Mobility reports auto loan delinquency exceeded recession-era highs in the first quarter.
Outstanding auto loan balances totaled $987 billion in the fourth quarter 2015, up 11.5% from the year-ago period and the highest level since Experian Automotive began publicly tracking the data in 2006.
Despite auto loan balances rising by $101 billion, delinquencies remained flat from a year ago. Officials with the credit reporting agency said their seeing controlled and deliberate growth by lenders.
Data from the second quarter didn't support talk of a subprime auto bubble, with subprime financing showing signs of leveling off and delinquencies remaining at historic lows.
While 60-day automotive loan delinquencies fell nationally, 22 states experienced increases. The sharpest increase occurred in Delaware, where delinquencies jumped by nearly 10%.
Since 2011, auto loan debt per borrower has increased 13%, according to Transunion. The firm also reported that delinquencies experienced a sharp drop from 2013's end-of-year quarter.
Delinquencies in the fourth quarter 2012 experience their first year-over-year increase since 2009, but they still remain below precession levels, Experian Automotive reports.
Like previous quarters, the third quarter saw finance sources continuing to delve deeper into the credit spectrum. But is this good for the industry?
The credit reporting agency attributes the rise in the auto loan 60-day delinquency rate to seasonal patterns, says the rate is still down 56 percent from a recession high of 0.86 percent.
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