Tuesday, August 28, 2012
Report: Auto loan delinquency rates at historic lows
One indicator of the status of our economy is the rate at which car owners are able to make payments, or rather, aren't. The rate at which owners can't get the check in the mail for their new car is called the delinquency rate, and according to a Los Angeles Times report, it has fallen to an all-time low.
Credit report entity TransUnion began tracking this data in 1999, which it calculates as the percentage of borrowers 60 or more days past due. Currently that rate was recorded at 0.33% for the second quarter of 2012 - down from 0.36% in the first quarter and a full 25% lower than last year.
Auto sales in the U.S. have risen 14% in the first seven months of 2012 to 8.4 million vehicles. Experts suggest this is a result of more relaxed credit conditions, allowing buyers with poorer credit to find a way to purchase a new car. This trend could eventually result in the delinquency rate climbing back up.
"We are at such a low delinquency level" said Peter Tureck, automotive vice president for TransUnion's financial services business wing, "that a slight rise through the end of the year should be expected, though the overall rate will remain relatively low."
Which states have the highest delinquency rates in the country right now? That would be Louisiana, Mississippi, and Oklahoma, all of which are within the 0.55% to 0.60% area.Permalink | Email this | Comments