The last physical quarter of 2011 saw the rate of auto loan delinquencies decline. This glimpse of positive economic news is especially noteworthy since it is only the third time in the past ten years that year-over-year delinquency rates have dropped.
Talking about the strengthening auto loan market, Peter Turek, automotive vice president of TransUnion’s financial services business unit, said, “Except in 2009 where there was no change and in 2003 where there was about a 4% drop, auto delinquency rates have shown upward movements between third and fourth quarters averaging in excess of 5%.
Turek added, “Ending the year flat is particularly interesting, because the number of new auto loans coming onto the books has consistently increased since the end of the recession, a primary driver of which has been an expansion in lending to consumers in the subprime market.”
Though slight, the year-over-year numbers trended in the right direction, downward. The percentage of borrowers behind on their payments by 60 days or more fell to 0.46% from last year’s 0.59%. TransUnion expects the trend to continue for at least the first two quarters of 2012.