Auto Loan Delinquencies Hit All-Time Low

Delinquency rates fell to 0.36% during first-quarter 2012.

May 24, 2012

The national auto loan delinquency rate (the rate of borrowers 60 or more days past due) reached its lowest level since TransUnion began tracking the data in 1999.

Auto loan delinquency rates during the first quarter of 2012 dropped to 0.36%, down nearly 27% from the same period in 2011 (0.49%).

On a quarterly basis, auto loan delinquencies declined almost 22% from 0.46% in during the fourth quarter of 2011.

“Auto loan delinquencies continue to perform exceptionally,” says Peter Turek, automotive vice president in TransUnion’s financial services business unit. “This can be attributed primarily to growing demand for both new and used vehicles and higher used vehicle values, which equates to an increase in equity for consumers. “We are seeing increases in both lending and leasing across the board, along with a higher number of loans originated in the nonprime risk segments.”

Between fourth-quarter 2011 and first-quarter 2012, 43 states experienced declines in their auto loan delinquency rates.

“We anticipate national auto loan delinquency rates to remain relatively low for the remainder of the year, rising and decreasing with traditional seasonal patterns,” Turek says. “However, a slight increase from this record-low level would not be surprising and should not be construed as a negative event, as lenders continue to originate more loans to consumers across all credit risk levels.”

TransUnion's forecast is based on various economic assumptions, such as unemployment rates, consumer sentiment, disposable income, and interest rates.

Auto delinquency