The auto loan delinquency rate – at least 60 days overdue – continued to slide in the first quarter of 2010, down to 0.66 percent, according to the credit reporting agency TransUnion.
The delinquency rate fell 18.52 percent from the fourth quarter of 2009, and 20.48 percent from the first quarter of 2009.
TransUnion’s analysis was taken randomly from about 27 million credit files representing 10 percent of credit-active U.S. consumers.
Auto loan delinquencies were highest in Louisiana and Alabama at 1.20 percent and 1.13 percent, respectively. The lowest rates were found in Alaska (0.33 percent), North Dakota (0.33 percent) and Montana (0.37 percent).
Average auto debt nationally fell slightly from the fourth quarter, from $12,568 to $12,501. Year-over-year, auto debt fell by 0.75 percent in the first quarter.
“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. “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.”
TransUnion’s forecast calls for the auto loan delinquency rate to continue its downward trend throughout the rest of the year.
Decline in the delinquency rate is a positive sign for the economy. The lesser the rate the more amount of debts are paid on time thus reducing the number of repossessions of vehicles. I came across two articles where delinquency rate has been explained very precisely. Following are the links: http://autoreliefgroup.wordpress.com/2010/03/18/florida-holds-8th-rank-in-auto-loan-delinquencies/
http://autoreliefgroup.wordpress.com/2010/03/18/delinquency-rate-for-auto-loans-declined-in-the-last-quarter-of-2009/
These two articles are written by Auto Relief Group who is in the business of loan modification for the past fifteen years. I’m sure the automobile industry will soon revive and outperform other industries too.
[...] is good news about the situation, however. There is some evidence, according to the credit reporting agency Trans Union, that auto loan delinquencies may be starting to slow down. Along with the other positive signs [...]