TransUnion: Late auto-loan payments rose in 3Q
By Alex Veiga
Topics: From the Wires, News
LOS ANGELES (AP) — More Americans fell behind on their auto-loan payments in the third quarter, when back-to-school shopping and other needs traditionally put a strain on consumers’ wallets.
But the uptick is likely only a seasonal blip in an otherwise multiyear decline in auto-loan delinquencies, reporting agency TransUnion said Tuesday.
The rate of U.S. auto-loan payments at least 60 days overdue rose to 0.38 percent from 0.33 percent in the second quarter, the company said.
That represents only a slight uptick from the second quarter, which marked the lowest delinquency rate on TransUnion’s records going back to 1999.
The July-to-September delinquency rate also was down 19 percent from the 0.47 percent rate a year earlier, the firm said.
All told, the auto-loan delinquency rate has fallen on an annual basis for 12 consecutive quarters.
“Based on the data, this looks like it’s attributed to really just the seasonal factors,” said Peter Turek, a vice president of TransUnion’s financial services business unit.
Since the housing collapse in 2007 and recession that followed, many borrowers have made keeping up with car payments a priority above paying their mortgage or other financial obligations.
Other factors also have influence the trend, including low interest rates on loans, which have made financing more affordable. A strong market for used cars also has played a role in lowering auto-loan delinquency rates because it has given borrowers an incentive to avoid falling behind on payments.
As a result, auto-loan delinquencies have fallen 56 percent since the recession high of 0.86 percent set in the fourth quarter of 2008, TransUnion said.
The trend has held up even as drivers have been taking on higher levels of auto-loan debt.
In the third quarter, bank auto debt per borrower grew 5 percent to $13,571, up from $12,902 a year earlier, TransUnion said.
One reason for that is that banks are making more auto loans, which tend to have higher balances early on, as it typically takes several years for borrowers to pay them down.
The rise in auto sales also has spurred banks to step up lending even to borrowers with less-than-stellar credit.
TransUnion’s analysis of data on new auto loans lags by a quarter, so the most recent figures are for the second quarter.
Nearly 33 percent of new auto loans issued in the April-to-June period were made to nonprime borrowers, up from 30.2 percent a year earlier. Non-prime borrowers are defined as those with a score between 501 and 700 on the VantageScore credit scale, which runs between 501 and 990, with borrowers scoring at 900 or above being considered prime borrowers, or the safest credit bet.
The portion of all auto loans that went to nonprime borrowers in the second quarter was up 27.5 percent from the same period two years earlier.
In all, new auto loans and leases grew by 16 percent in the second quarter from a year earlier, TransUnion said.
The average balance of new auto loans also increased on an annual basis in the second quarter, rising 2.4 percent to $17,829.
Given the rise in auto loans going to higher-risk borrowers and the uptick in average balances, it’s plausible that the auto-loan delinquency rate could inch up in the fourth quarter, Turek noted.
“However, as the economy continues to improve and new and used auto demand maintains its current pace, we believe that the auto-loan delinquency rate will either remain the same or even drop a few basis points by the end of the year,” he said.
Related Stories
More Related Stories
-
Mississippi could begin prosecuting women for miscarriages
-
Teenage girl claims she was beaten up for looking like Taylor Swift
-
UK Military: London attack victim was a "model soldier"
-
Billionaire hedge funder: Babies, breast-feeding "kill" focus, keep women from succeeding
-
"Bookless library" set to open in Texas
-
2 more arrested in London attacks
-
Glenn Beck: CNN interview with atheist tornado survivor was a setup!
-
Incoming BBC news director on journalism gender gap: "We can do better"
-
Illegal construction, shoddy materials at fault in Bangladesh factory disaster
-
Ahead of Obama's speech, U.S. acknowledges four American drone killings
-
Must-see morning clip: Bill O'Reilly visits "The Daily Show"
-
Lawsuit alleges anti-gay hiring practices at ExxonMobil
-
Boy Scouts poised to vote, still greatly divided on gay youth
-
House supporters of KXL received $56m from fossil fuel industry
-
80-year-old becomes oldest to climb Mount Everest
-
Before FBI shooting man implicated self, Tsarnaev in triple murder
-
Paul McCartney backs Pussy Riot
-
UK emergency committee convenes after attack
-
Brave scout leader tried to reason with London attackers
-
If Alex Pareene were a cable news executive...
-
El Salvador court delays ruling on abortion case while woman's life hangs in the balance
Featured Slide Shows
The week in 10 pics
close X- Share on Twitter
- Share on Facebook
- Thumbnails
- Fullscreen
- 1 of 11
- Previous
- Next
-
Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
Credit: AP/LM Otero -
Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
Credit: AP/Matt Rourke -
A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
Credit: AP/Jenny Aicher -
Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
Credit: AP/Molly Riley -
Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
Credit: AP/J. Scott Applewhite -
Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
Credit: AP/Carolyn Kaster -
O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
Credit: AP/Las Vegas Review-Journal/Jeff Scheid -
Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
Credit: AP/NASA/Chris Hadfield -
When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
Credit: AP/Jacquelyn Martin -
A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
Credit: AP/The Duluth News-Tribune/Clint Austin -
Recent Slide Shows
- Share on Twitter
- Share on Facebook
- Thumbnails
- Fullscreen
- 1 of 11
- Previous
- Next
Related Videos
Most Read
-
Oklahoma senator: Tornado aid "totally different" from Sandy aid
Jillian Rayfield
-
Tornado survivor to Wolf Blitzer: Sorry, I'm an atheist. I don't have to thank the Lord
Mary Elizabeth Williams
-
9-year-old slams Rahm over Chicago schools
Natasha Lennard
-
Facebook's hate speech problem
Mary Elizabeth Williams
-
Inhofe and Coburn: Red state hypocrites
Joan Walsh
-
Experts: Fox News spying scandal a game-changer
Natasha Lennard
-
Brad Pitt keeps breaking his silence on how boring marriage to Jennifer Aniston was
Daniel D'Addario
-
Judge tells lesbian couple to separate -- or lose kids
Irin Carmon
-
Revenge, ego and the corruption of Wikipedia
Andrew Leonard
-
Did a Salon excerpt ruin Penn Jillette's chance to win "Celebrity Apprentice"?
Daniel D'Addario
Popular on Reddit
links from salon.com

1123 points1124 points1125 points | 530 comments

737 points738 points739 points | 186 comments
From Around the Web
Presented by Scribol
- Ancient cave paintings found in northeastern Mexico
- Russian rejects parole request by hunger-striking Pussy Riot member Maria Alyokhina
- Sevan Nisanyan: Turkish-Armenian blogger jailed for blasphemy
- Boy Scouts lift ban on openly gay boys
- Valery Giscard d'Estaing: Former French president attacked by panda


Comments
0 Comments