Auto Loan Delinquencies Drop in Fourth Quarter Compared to Last Year

The national 60-day auto loan delinquency rate did not change between the third and fourth quarters of 2009. The rate of borrowers 60 days or more past due on their car loans was 0.81 percent in the fourth quarter, and continues to be less than one percent overall. But compared to the fourth quarter of 2008, the national rate dropped by 5.81 percent, according to TransUnion’s quarterly analysis of trends in the auto industry.

"Going against traditional seasonal patterns, the flattening of auto delinquency rates in the fourth quarter may be an optimistic sign for payment behavior over the remainder of this year," said Peter Turek, automotive vice president in TransUnion’s financial services business unit, in a statement. "Part of the reason why we may be seeing a gradual turnaround in delinquency rates is the impact of new lower risk loans over the past several quarters including new loans from the popular government program, Cash for Clunkers."

"Given a more positive outlook for GDP and other economic indicators except for employment, our current forecasting models point to a national 60-day auto delinquency rate of 0.65 percent by midyear, a decrease of 19.7 percent compared to fourth quarter 2009," said Turek.

Compared to the mortgage industry, the auto loan delinquency rate is very low at less than one percent. The 60-day mortgage loan delinquency rate increased for the 12th straight quarter, hitting an all-time national average high of 6.89 percent for the fourth quarter of 2009.

TransUnion’s quarterly data comes from about 27 million anonymous, randomly sampled, individual credit files, representing about 10 percent of credit-active U.S. consumers.