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TransUnion: Auto Loan Delinquency Rate Flat, Debt Grows
CHICAGO (8/21/13)--The rate of U.S. auto delinquencies--the percentage of accounts 60 or more days past due--during second quarter remained flat at 0.80%, compared with 0.79% for that quarter a year earlier, according to data from TransUnion's Industry Insights Report.
 
The delinquency rate for second quarter is an eight-basis-point drop from 0.88% in first quarter, said the Chicago-based credit and information firm. The report is a quarterly overview of data, trends and perspectives on consumer lending in the U.S.
 
Average auto loan balances rose 4.3% to $13,435, from $12,875 during second quarter 2012.  The increase from first quarter to second quarter 2013 was 1.3%. Michigan was the only state that did not experience an increase in balances.
 
"It's encouraging to see consumers take on more auto debt while delinquencies remain low," said Peter Turek, TransUnion vice president of automotive. "Consumers clearly are more confident in managing additional debt."
 
Although the debt of subprime borrowers increased more than 7% the past year, delinquency levels for this group remained roughly the same--at 5.02% for second quarter 2013 compared with 4.94% in the same quarter a year earlier. Subprime borrowers still account for about 14.9% of all new accounts.
 
"This is a positive sign since increased balances for the subprime group indicate that they are receiving new loans," Turek said. "The fact that the increase in delinquencies is only a minor one is especially important, as we often find that borrowers who have problems making payments do so within the first year of the loan."
 
Total auto account volumes rose 4% in the past year to $58.23 million for second quarter 2013, compared with $55.98 million in second quarter of 2012.  "We expected to see volumes rise in line with overall auto sales and other demand drivers, like replacement of older vehicles and improving employment numbers," said Turek.
 
Highest auto loan delinquency states for second quarter were Oklahoma with 1.53%, Mississippi with 1.46%, Louisiana with 1.35% and Alabama with 1.27%. North Dakota had the lowest delinquency rate, at 0.43%, followed by Minnesota and Vermont at 0.49% each, and Washington with 0.52%.
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