The national auto loan delinquency rate has reached its lowest level since TransUnion began tracking the data in 1999.
The firm looked at the rate of borrowers who were 60 or more days past due. Auto loan delinquency rates in the first quarter dropped to 0.36%, down nearly 27% from the first quarter of 2011. On a quarterly basis, auto loan delinquencies declined almost 22% from 0.46% in the fourth quarter of 2011.
Forty-three states experienced declines in their auto delinquency rates between the fourth quarter of 2011 and the first quarter of this year, TransUnion reported.
The record drop in delinquencies can be attributed primarily to a growing demand for both new and used vehicles and higher used vehicle values, which equates to an increase in equity for consumers, said Peter Turek, automotive vice president in TransUnion’s financial services business unit.
Lending and leasing as well as a higher number of loans originated in the nonprime risk segments are also on the rise, Turek said. The delinquency rate is expected to remain low for the rest of the year but may rise and fall with traditional seasonal patterns, he added.