Consumers Continue to Keep Up With Car Loans

Here’s a little good news in a dour financial market: Americans are doing better and better at making their car payments on time. A new survey from credit reporting agency TransUnion says that the percentage of borrowers who were 60 days late or more on their auto loans fell during the second quarter of this year for the seventh quarter in a row.

During the period of April to June, only 0.44 percent of all all auto loans were delinquent by 60 days or more, down from 0.53 percent during the same time last year.

“The numbers indicate that consumers are handling their auto debt very well,”said Peter Turek, automotive vice president in TransUnion’s financial services business unit, as quoted in an ABC News piece .

By state, Mississippi has the highest rate of delinquency at 0.85 percent and Louisiana is next at 0.83 percent. At the other end is Idaho, with the lowest rate at 0.19 percent and Vermont at 0.23 percent.

Low interest rates have been helpful in perpetuating this national trend of timely car payments, but tighter lending standards have made a difference as well, as recent loans have gone to borrowers with good credit scores and strong repayment histories. Still, unlike the mortgage market, auto lenders are still making room for many types of borrowers.

“What we’re seeing in the numbers is that lenders are continuing to make loans,” Turek said. “There’s plenty of credit availability out there.”

And here’s a little more good news for the road: TransUnion predicts that the delinquency rate on car loans will continue to decline throughout 2011, assuming the economy doesn’t return to recession.

One Response to “Consumers Continue to Keep Up With Car Loans”

1. Maria Schubert says:

   September 25, 2011 at 4:08 am

   Hi Amber,

   Wow! This is very good news indeed. It seems that today more borrowers are smarter and on time with their payments. This is definitely good news for the car loan industry. People are now fully aware of what can happen if they do not make their payments on time and are doing everything they can to keep up with payments. Lenders today should be much more confident approving car loans of new applicants because of the trend which seems to be getting better and better. Hope this continues!