Consumers Continue to Keep Up With Car Loans

August 25th, 2011 by Lauren Hazon | Print




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.

 

 

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