Auto loan delinquencies hit their lowest levels in the United States

Article by Christian A., on August 23, 2012

Credit bureau TransUnion said that customers have increased their borrowing and there are fewer incidences of these customers falling behind on their payments; however, he doesn’t expect the record-low delinquencies in the U.S. to last. Peter Turek, the automotive vice president for TransUnion’s financial services business unit, said that delinquencies will probably increase in the second half of 2012 but will stay at low levels. A similar opinion was given last week by Melinda Zabritski, director of automotive lending for Experian Automotive. They both say that delinquencies are low even with an increase in subprime borrowing but that eventually the increase in subprime will result to an increase in delinquencies.

TransUnion said that delinquencies of 60 days or greater (which have the most likelihood of being written off) reached a record low in the second quarter of 2012, for the second quarter in a row. TransUnion has been monitoring the information since 1999. TransUnion said that the delinquency rate for the second quarter of 2012 was 0.33%, representing a decline from 0.36% in the first quarter of this year.

Year over year, auto loan delinquencies fell by 25% from 0.44% in the second quarter of 2011. Turek released a written statement to cite a TransUnion study made earlier this year that determined that since the recession, consumers that had difficulty paying all their bills are placing their car payments ahead of mortgage or credit card debt since they have to get their cars to get to work and keep their jobs. Turek told Automotive News this year that mortgages came first in the previous downturns. Furthermore, since used-car values are strong, customers aren’t as likely to be upside-down in their auto loans (owing more than the car’s value). Turek said that this is an added motivation for customers to keep their auto loan current. [source: Automotive News - sub. required]

If you liked the article, share on:

Comments

Recommended

Is there anything more exciting than a spoiler? Well, for those who didn't know, there are those who have already seen the Mercedes-AMG Project One (in the flesh) way before...
by - April 25, 2017
Does the Honda Passport ring a bell to you? This was the first ever SUV that was sold by the Japanese automaker, but it was not that successful compared with...
by - April 25, 2017
Wagon buyers who prefer their vehicle to be luxurious, you will have an entirely brand new selection at the latter part of this year. Porsche will start rolling out 4...
by - April 25, 2017
McLaren rejects the idea of creating anything other than a sports car. That means that vehicles that would be ideal for families such as an SUV or a crossover are...
by - April 25, 2017
The new and improved Opel Grandland X is out, and this large SUV is something the European market did not know they would need. Now measuring at 14.7 feet (4.48...
by - April 25, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries