Auto Loan Delinquency Rate On The Rise
CHICAGO-The national 60-day auto delinquency rate (the ratio of auto loan borrowers 60 or more days past due) rose 9.4% between the second and third quarters of 2010 to 0.58%, according to a TransUnion quarterly analysis of trends in the auto industry.
The year-over-year delinquency rate at the national level fell by 28.4% in the third quarter. TransUnion is foreasting that the 2011 auto loan delinquency rate-which looks at the ratio of auto loan borrowers 60 or more days past due-will experience a 3.2% decline throughout next year. TransUnion is projecting a 0.62% delinquency rate at the end of 2010 and a 0.60% rate at the conclusion of 2011.
TransUnion also said it expects national auto loan delinquency rates in 2011 to continue to be well below the peak levels experienced during the heart of the recession in the fourth quarter of 2008. In fact, the projected delinquency rate would be more than 30% below that level.
"Newer, lower-risk loans are still entering the market and are helping to reduce delinquency rates, though consumers are still cautious in the short term given the employment situation, focusing their attention on savings and lower consumption of discretionary goods," the company said.
TransUnion estimates that the 60-day auto delinquency rate will continue to exhibit seasonal patterns and gradually stabilize next year.
Forty-five states and the District of Columbia are expected to experience declines in auto delinquency next year, led by Montana, Missouri and Indiana. Though five states are expected to see higher auto loan delinquencies next year, the increases should be relatively small.