The rate of delinquent auto loans rose by 9% in the second quarter of 2014 versus thesame period in 2013 while outstanding auto debt also rose for the13th straight quarter, according to TransUnion, one of the nation's three consumer data analyticfirms.

|

The auto loan delinquency rate, which TransUnion defined as 60days or more late, rose to 0.95%, up from 0.87% in the secondquarter of 2013, but firm also reported auto loan delinquency fellfrom 1.00% in the first quarter of 2014.

|

“Auto lending remains similar to what we have observed duringthe last several quarters,” said Peter Turek, automotive vicepresident at TransUnion. “Delinquency rates remain relatively lowwhile auto loan balances keep rising – both metrics aided byincreasing auto loan originations”

|

There are four million more auto loan accounts in themarketplace than TransUnion observed last year, Turek noted.

|

“This means with more auto loans in the marketplace and adelinquency rate ticking higher, we now have several thousand moredelinquent accounts than at the midpoint of 2013,” he added.

|

TransUnion also reported that auto loan debt per borrower jumped4.1% from the second quarter of 2013, moving from $16,410 in2013 to $17,090 in 2014.

|

The increase in auto debts occurred in every state and withevery age of borrower, with borrowers aged 40 to 49 taking out thelargest auto loans at $18,840.

|

The firm also found the delinquency rate on subprime auto loanborrowers also increased from 4.12% in the second quarter of 2013to 4.61% in the second quarter of 2014 and that the share of autoloan originations held by subprime borrowers increased by 56 basispoints over the same period, from 33.80% in 2013 to 34.36% in2014.

|

TransUnion said that this is still less than 38.98% of autooriginations that were in place during the first quarter of2007.

|

“It will be interesting to see if lending to the subprimesegment of the population continues to grow and what, if any, theimpact will be on the overall delinquency rate,” Turek said.“Historically, increased subprime lending pushes the overalldelinquency rate higher. This is not necessarily a bad thing forthe auto ecosystem – consumers find reliable transportation forwork, lenders actively minimize the risk, and dealers sell morecars.”

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.