Smart Borrower Blog

Archive for the ‘Used Car Loans’ Category

Auto Delinquencies Post Slight Seasonal Rise

There were more auto loan borrowers behind on their payments during the third quarter of this year compared to the previous quarter, but the small uptick is nothing to worry about, according to credit reporting agency TransUnion. The percent of customers who were late by 60 days or more on their car payments rose to 0.47 percent between June and September, up from 0.44 percent in the second quarter. The new rate is still part of a downward trend, as it is down from 0.58 percent one year ago. TransUnion reports that auto delinquencies typically rise in the third quarter... more »

Equifax Anticipates Return to Pre-Recession Auto Loan Levels

Auto loan originations continued to grow on a yearly basis during the first six months of 2011, according to a new report from credit reporting agency Equifax, and figures could be back into pre-recession territory by the end of the year. During the period from January to June 2011, new car loan originations increased 15 percent to 9.6 million, up over the first six months of 2010, when total loans were at 8.3 million. Moreover, when factoring in total originations from the first half of 2009, which were only 7.5 million, this is quite a significant trend. However, the new... more »

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... more »

Q1 Auto Loans Beat ‘Cash for Clunkers’ Results

The U.S. auto lending market is continuing to grow, according to the latest data from credit reporting agency Equifax Inc. The number of car loans increased by 21 percent during the first quarter of this year compared to the same time last year. “While some sectors of the economy – most notably housing – continue to struggle, the auto lending sector has displayed positive gains based on loosening of credit to both prime and subprime borrowers paired with improvements in consumer payment behavior, which is reflected in the declining number of auto loan delinquencies,” said Michael Koukounas, Senior Vice President... more »

Auto Loan ABS Sitting Pretty

The Fitch Ratings company is seeing plenty of positive signs coming out of the auto loan industry these days. Specifically, in its latest collection of data, Fitch has found improvement in car loan delinquencies and defaults and in used car values, both  leading to better performance of auto loan Asset-Backed Securities (ABS). Both prime and subprime auto loans showed some progress in February. Among primes loans, the annualized net losses (ANL) fell by 3.2 percent from January to 0.90 percent. February’s ANL were also down 42 percent from the year before. Subprime ANL were down 13.7 percent from the previous... more »

Controversial Car-Title Lending Bill Moves Forward in VA

The Virginia House passed a bill Monday that has tweaked many noses, including those of neighboring states. The bill, which now must go back to the state Senate for a vote, would allow car-title lenders to make loans to out-of-state drivers. The problem is that many of the surrounding states have banned this type of lending, because of its so-called predatory nature. Car-title lenders operate by lending quick money to individuals who use their cars as collateral. Virginia itself has had a ban on these loans to out of state residents for the past 6-months, but this bill, which is... more »

Auto Lending Taking Top Priority for Banks

Toronto-Dominion Bank (TD) has agreed to buy car loan company Chrysler Financial Corp. for $6.3 billion in cash as of Tuesday. Why is this pertinent information? Because it signals just how important auto lending has become to bank portfolios these days. Auto loans make up roughly 30 percent of all consumer debt, according to TD. Only mortgage loans and credit card loans have larger market shares, but car loans tend to be much safer than the other two, making them very attractive to banks right now. For example, according to credit bureau TransUnion, auto loans in the third quarter had... more »

Auto Lending Market Starting to Thaw Out

The lastest statistics suggest that the ice is melting on the car loan credit, especially for borrowers with less than perfect credit. A report released yesterday from credit reporting agency Experian showed that the 12.7 percent of all new car sales went to non-prime and subprime buyers in the third quarter, a 13 percent increase from the previous year. That rate has not increased since 2007. The percentage of used car loans to subprime borrowers grew by 3 percent. Now 63 percent of all car loans are going to prime credit buyers (those with scores above 680). Last year 66... more »

Refinancing Your Car Loan Might Save You Money

With interest rates at rock bottom lows, many people are unaware that they may be able to refinance their auto loan and save money. While refinancing your car loan will not save you the kind of money you would save from refinancing your home, it certainly can be worth looking into. You should not expect your monthly payment to drop significantly however, your overall savings for the life of the loan can make it worthwhile. To determine if you are eligible and if refinancing your car loan will be worth your while, you will first want to check the terms... more »

Auto Delinquencies Are Down – And So Are Interest Rates

More Americans are getting back on top of their car payments, according to credit ratings agency TransUnion. The company’s latest data show that just 0.53 percent of auto loans were 60 days or more delinquent in the second quarter of the year. That’s down 20 percent from the first quarter and 27 percent from the previous year, accounting for the largest yearly drop in nine years. “The national trend we are seeing continues to point to a clear improvement in payment behavior,” said TransUnion’s Peter Turek as quoted in the Wall Street Journal. “Although part of the reason for the... more »