Despite the nine-basis-point increase, the auto loan default rate remains near levels recorded one year ago. However, declining auto sales and the normal end-of-year push to make room for newer models may encourage easier credit conditions and raise concerns about future defaults.
While consumer credit quality continues to look healthy, the national composite was 1.38 percent in September, slightly up from 1.34 percent in August.
The auto loan default rate rose slightly from January to February, but remains below year-ago levels. The two firms also report that overall consumer credit remains healthy.
Auto was the only loan type to show an increase in its default rate, but officials with the S&P/Experian Consumer Credit Default Indices don’t seem concerned.
Data from the S&P/Experian Consumer Credit Default Indices indicated that the auto loan default rate inched up from July to August.
Falling from 1.29 percent to 1.27, the auto loan default rate continued to improve along with other credit categories in July, according to the S&P/Experian Consumer Credit Default Indices.
Monthly default rates for auto loans and second mortgages have increased through July, while rates decreased for first mortgages and bank car loans, according to new data released today by Standard & Poor’s and Experian.
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