Experian Automotive announced Tuesday that quarterly vehicle repossessions dropped by 14.8% to achieve the lowest rate since it began tracking the data seven years ago.
According to its latest State of the Automotive Finance Market report, 0.36% of all vehicle loans ended in a repossession, down from 0.43% in Q2 2012. The change also represented a 10.4% decrease from the previous low of 0.41% in Q2 2006.
"Repossession and delinquency rates seen this quarter were lower than expected," said Melinda Zabritski, Experian's senior director of Automotive Credit. "The seasonality of the market usually has the first quarter showing the lowest 30-day delinquency rates, but even with the total automotive loan portfolio growing, consumers in the second quarter have done an exceptional job of meeting their financial obligations to keep the market strong."
Additional findings from the report showed that 30-day delinquencies decreased by 5.6% year over year, going from 2.52% in Q2 2012 to 2.38% in Q2 2013. While slightly up from Q1 2013 (by two basis points), this decrease brings 30-day delinquencies to its lowest level for the second quarter since 2006. Sixty-day delinquencies remain relatively flat year over year but still are extremely low at 0.58%. (Q2 2006 showed 60-day delinquencies slightly lower at 0.53%, but 2013 is the next-lowest Q2 point.)
The report also showed that the total balance of outstanding automotive loans grew from more than $682 billion in Q2 2012 to nearly $751 billion in Q2 2013. Banks increased their total dollar volume by $24 billion, followed by credit unions ($18 billion), finance companies ($16 billion) and captive finance companies ($11 billion).
In other findings:
- The balance of loans that are 30 days delinquent rose by $761 million in Q2 2013. However, on a percentage basis, delinquencies represent just 1.96% of the total loan balance, down from 2.05% in Q2 2012.
- Sixty-day delinquencies account for just 0.42% of the total loan portfolio dollar value. This delinquency rate is flat year over year.
- Average charge-off amounts for defaulted loans were up by $450, from $6,768 in Q2 2012 to $7,218 in Q2 2013.