The rate of auto payments 60 days or more past due dropped to 0.53% of outstanding auto loans in the second quarter, from 0.73% a year ago, according to TransUnion.

The drop in the auto loan delinquency rate is in line with declines in late credit card and mortgage payments, according to TransUnion's review of 27 million credit reports in its database, or about 10% of individuals with active credit accounts.

New loans written during the quarter rose 18.7%, TransUnion officials said. The average size of an auto loan edged up slightly, to $12,643 from $12,560 a year ago. The change reflects a rise in car purchases, says Peter Turek, automotive vice president in TransUnion's financial services group. While the number of new loans hasn't returned to pre-recession levels, the increase in originations means buyers are taking advantage of automakers' aggressive sales promotions, he adds.


The delinquency rate was up in just three states: Rhode Island, where it reached 0.74%; Utah, at 0.71%; and Montana, at 0.38%. Overall, rates were below the national average in 28 states and Washington, D.C.

North Dakota has the best payment record, with a delinquency rate of just 0.28%. Mississippi has the highest delinquency rate, at 1.05%.

The effects of the recession continue to play out in some regions because auto loan payments are more closely linked to unemployment than other borrowing such as credit cards, which consumers typically treat as a higher priority. TransUnion expects the auto delinquency rate to tick up to about 0.6% by the end of the year, mostly due to seasonal patterns. Delinquency rates on auto loans tend to fall in the first half of the year and remain flat or rise later in the year.

The figure remains slightly higher than the historical norm. Turek says auto sales must return to more normal levels - an estimated 16 million cars per year from roughly 11 million currently - for the delinquency rate to fall further.

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