Auto loan delinquencies have decreased markedly since peaking during the recession at 0.86% in the fourth quarter of 2008. Since that time, 60-day auto loan delinquencies have dropped on a year-over-year basis to 0.81% in Q4 2009, 0.59% in Q4 2010 and now to the expected 0.51% level for the end of 2011 and 2012.
“Auto loans have performed quite well since the beginning of 2010 and we expect delinquencies to remain relatively low throughout 2012 as the gradual recovery in the economy will benefit both lenders and consumers,” said Peter Turek, automotive vice president in TransUnion’s financial services business unit. “With auto loan originations increasing dramatically in the last few years, one cause for concern is that any dramatic economic pressures — like we experienced during the last recession — could elevate delinquency levels since missed payments often occur early on in the life of the loan.”
Auto loan originations have greatly increased since the end of the recession in Q2 2009, moving up nearly 28% as of Q2 2011 (latest data available). Quarterly originations are nearly 41% higher than the lowest levels observed during the recession in Q4 2008 and have risen approximately 8.4% in the last year.
Twenty-one states are expected to see delinquencies drop by the end of 2012, while 29 states should experience increases. The largest yearly percentage auto delinquency declines are expected in Michigan (-14.54%), Rhode Island (-14.22%) and North Carolina (-14.54%). The largest percentage increases are expected in North Dakota (72.47%), Alaska (25.43%) and Iowa (21.06%). Despite the large percentage increase in North Dakota’s auto delinquency rate, the state is still expected to have the lowest level in the nation at 0.16%.
TransUnion’s forecast is based on various economic assumptions, such as unemployment rates, consumer sentiment, disposable income, and interest rates. The forecast changes as the economy deviates from a conservative economic forecast or if there are unanticipated shocks to the economy affecting recovery.
60-Day Auto Loan Delinquency Projections for 2012
|2010-2012||Q4 2010||Q4 2011||Q4 2012|
|Highest Auto Loan Delinquency States||Q4 2012|
|Lowest Auto Loan Delinquency States||Q4 2012|
The most current auto loan delinquency data for the nation and every state can be found atwww.transunion.com/trenddata.
TransUnion’s Trend Data database
TransUnion’s Trend Data is a one-of-a-kind database consisting of 27 million anonymous consumer records randomly sampled every quarter from TransUnion’s national consumer credit database. Each record contains more than 200 credit variables that illustrate consumer credit usage and performance. Since 1992, TransUnion has been aggregating this information at the county, Metropolitan Statistical Area (MSA), state and national levels. For the purpose of this analysis, the term “credit card” refers to those issued by banks.
As a global leader in information and risk management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering high quality data, and integrating advanced analytics and enhanced decision-making capabilities. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Founded in 1968 and headquartered in Chicago, TransUnion reaches businesses and consumers in 23 countries around the world. www.transunion.com/business