Auto Loan Delinquency Rate Drops 18 Percent

The number of auto loans that were 60 or more days late fell 18.52 percent between the fourth quarter of 2009 and first quarter of 2010 to 0.66 percent, according to TransUnion’s quarterly analysis of auto industry trends, which it released May 25.

When comparing the first quarter of 2010 to the first quarter of 2009, the 60-day auto loan delinquency rate dropped by 20.48 percent.

"The national trend we are now seeing points to a clear improvement in payment behavior," said Peter Turek, automotive vice president in TransUnion’s financial services group, in a statement. "As we noted last quarter, part of the reason for the turnaround in delinquency rates is the influx of new, lower risk loans. Furthermore, this downward trend was energized by first quarter improvements in economic factors such as consumer confidence and savings rates, which demonstrated consumer willingness to focus on debt obligations."

Subaru Outback

The economy might be improving, as consumers are better able to make their auto loan payments on time.

"TransUnion expects next quarter’s national 60-day auto delinquency rate to continue to move downward due in part to seasonal factors, but also because of general improvement in certain aspects of the economy. Given a more positive outlook in per capita disposable income and projected new vehicle sales, our forecasting models point to a national 60-day auto delinquency rate in the range of 0.68 percent by year-end, factoring in the strong seasonal uptick in delinquency typical in the fourth quarter."

When comparing other types of consumer debt, the first quarter mortgage delinquency rate was 6.77 percent, and the credit card delinquency rate was 1.11 percent.

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.