Smart Borrower Blog

Auto Originations and Delinquencies Up in Latest Reports

Nov 28th, 2012 @ 3:08 PM by Amber Nelson

More American consumers lagged behind on their car loans in the third quarter, according to credit information company TransUnion, but delinquency rates remain near historic lows and new loan creation is growing.

Between July and September of this year, the rate of borrowers late on their payments by more than 60 days increased to 0.38 percent, up from 0.33 percent in the second quarter, but fell 19 percent from 0.47 percent one year ago. The second quarter rate represented the lowest on record for TransUnion, and delinquencies have dropped 56 percent since their recession peak in the fourth quarter of 2008.

“Since TransUnion began tracking the auto loan delinquency rate in 1999, we have observed a seasonal increase in this variable every year between the second and third quarters,” said Peter Turek, automotive vice president in TransUnion’s financial services business unit in a MarketWatch article. Things like back-to-school purchases and holiday shopping are typically what put some borrowers behind, he said. “Based on the data, this looks like it’s attributed to really just the seasonal factors.”

Backing up his statement is the fact that the delinquency rate has dropped on a yearly basis for 12 straight months now.

Meanwhile, lenders are continuing to feel friendlier toward car loans, and even non-prime auto loans. New loans and leases increased 16 percent in the second quarter from the previous year, according to TransUnion. And during that time, almost a third of all new loans were made to non-prime borrowers, those with credit scores between 501 and 700. That’s up 30.2 percent from the second quarter of 2011.

“With increased auto loan balances and more loans going to non-prime borrowers, it is plausible that some pressure may be placed on the auto loan delinquency rate,” Turek said. “However, as the economy continues to improve and new and used auto demand maintains its current pace, we believe that the auto loan delinquency rate will either remain the same or even drop a few basis points by the end of the year.”


About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to and

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