A slight blip on the auto delinquency radar cropped up in the latest quarter, according to data from Experian Automotive, but overall the car loan industry remains healthy.
Auto loans that were 60-days late on payments rose to 0.74 percent of all loans in the fourth quarter of 2012, up from 0.72 percent in the same quarter of 2011. While it is a small increase, it is notable because it is the first increase in three years. The last yearly increase in either 30-day or 60-day delinquencies occurred in the fourth quarter of 2009.
Sixty-day delinquency rates have also fallen well below the last cyclical peak of 0.94 percent reached in 2009 fourth quarter as the economy was in free fall.
“They’re definitely lower than they were during the recession,” said Melinda Zabritski, director of automotive credit for Experian Automotive in a AutoNews article.
The latest quarter did continue to show a decline in 30-day delinquencies however. They feel to 2.72 percent from 2.79 percent the year before.
“Overall, our …analysis shows that the auto lending market is extremely healthy,” Zabritski said in a press release. “Of course, you never want to see an increase in delinquencies, but when you take a step back and look at the market compared to where it was three years ago, we still have remarkable stability.”
Repossessions were also down, according to Experian. In the fourth quarter of 2012, repossessions fell to 0.46 percent of all car loans, down 27.6 percent from 0.63 percent in the 2011 fourth quarter.
Delinquencies are likely to continue falling in the coming year as Americans continue to scale back on debt and the economy in general continues to pick up steam.
About Amber NelsonAmber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.
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