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TransUnion: Auto Loan Debt Rises for 11th Straight Quarter; Delinquencies Remain Subdued

CHICAGO, IL--(Marketwired - Feb 25, 2014) - Auto loan debt per borrower increased for the 11th straight quarter, moving up 4.4% from $16,060 in Q4 2012 to $16,769 in Q4 2013. On a quarterly basis, auto loan debt also increased from $16,685 in Q3 2013.

The auto loan delinquency rate (the ratio of borrowers 60 days or more delinquent on their auto loans) increased to 1.14% in Q4 2013, up on both a quarterly and yearly basis (from 1.04% in Q3 2013 and 1.09% in Q4 2012). The delinquency rate remains below the Q4 average of 1.29% observed between 2007 and 2013. 

The data provided are gathered from TransUnion's proprietary Industry Insights Report (IIR), a quarterly overview summarizing data, trends and perspectives on the U.S. consumer lending industry. The report is based on anonymized credit data from virtually every credit-active consumer in the United States.

"While we observed an uptick in auto loan delinquencies, there are reasons to believe they will continue to remain relatively low in the near future," said Pete Turek, vice president of automotive in TransUnion's financial services business unit. "First, while auto loan originations are increasing at a rapid pace, the percentage of non-prime accounts remains low. In fact, the percentage of non-prime borrowers for all auto loan accounts was lower in Q4 2013 than it was the previous year" 

The subprime delinquency rate (those consumers with a VantageScore® 2.0 credit score lower than 641 on a scale of 501-990) increased from 5.73% in Q4 2012 to 6.12% in Q4 2013. "While this is nearly a 7% yearly increase, it should be noted that subprime delinquencies remain below levels we observed during the recession," said Turek.

TransUnion recorded 60.5 million auto loan accounts as of Q4 2013, up from 57.0 million in Q4 2012. Viewed one quarter in arrears (to ensure all accounts are included in the data), new account originations increased to 6.64 million in Q3 2013, up from 5.99 million in Q3 2012. 

The share of non-prime, higher risk loan originations (with a VantageScore 2.0 credit score lower than 700) grew by 16 basis points (from 32.37% in Q3 2012 to 32.53% in Q3 2013). This percentage is still much lower than what was observed pre-recession (36.97% in Q3 2007). "We expect share of non-prime, higher risk loan originations to continue trending upward due to the growth of competitors in this segment."

Only 14 states experienced either a decline or had their auto loan delinquency rates remain flat between Q4 2012 and Q4 2013. The largest delinquency declines occurred in Oregon, New Jersey and Delaware. The largest increases occurred in Michigan, Alaska and Arkansas. Auto loan balances rose in every state between Q4 2012 and Q4 2013.

TransUnion is forecasting auto loan delinquencies to drop in Q1 2014 to 1.02% because of historic seasonality associated with auto financing. "Auto delinquencies tend to drop in the first quarter of the year, and we expect current market conditions will place downward pressure on delinquencies," said Turek. 

TransUnion's forecast is based on various economic assumptions, such as gross state product, consumer sentiment, unemployment rates, real personal income, and others. The forecast would change if there were unanticipated shocks to the economy.

This information is reported by TransUnion and is part of its ongoing series of quarterly analyses of credit-active U.S. consumers and how they are managing credit related to mortgages, credit cards and auto loans. To subscribe to TransUnion news releases, please click here.

Q4 2013 Auto Loan Statistics - Consumer-Level Delinquency Rates

Quarter over Quarter Q3 2013 Q4 2013 Pct. Change 

USA 1.04% 1.14% 9.6%

Year over year Q4 2012 Q4 2013 Pct. Change 

USA 1.09% 1.14% 4.6%

Auto Loan Consumer Delinquency Rates for Select States Q4 2013

California 0.88%
Florida 1.18%
Illinois 1.23%
New York 0.87%
Texas 1.40%

Largest Year-over-Year Increases Q4 2012 Q4 2013 Pct. Change

Michigan 0.96% 1.20% 25.0%
Alaska 0.59% 0.73% 23.7%
Arkansas 1.11% 1.34% 20.7%

Largest Year-over-Year Declines Q4 2012 Q4 2013 Pct. Change

Oregon 0.68% 0.60% (11.8%)
New Jersey 0.93% 0.88% (5.4%)
Delaware 1.42% 1.35% (4.9%)

Q4 2013 Auto Loan Statistics - Auto Loan Debt Per Borrower

Quarter over Quarter Q3 2013 Q4 2013 Pct. Change 

USA $16,685 $16,769 0.5%

Year over year Q4 2012 Q4 2013 Pct. Change 

USA $16,060 $16,769 4.4%

Auto Loan Debt per Borrower for Select States Q4 2013

California $16,949
Florida $16,759
Illinois $16,220
New York $14,812
Texas $20,948

Largest Year-over-Year Increases Q4 2012 Q4 2013 Pct. Change

New Mexico $18,453 $19,812 7.4%
Louisiana $18,598 $19,898 7.0%
Arizona $17,050 $18,240 7.0%

Largest Year-over-Year Declines Q4 2012 Q4 2013 Pct. Change


*No states experienced declines in their auto loan debt per borrower. 

About TransUnion

As a global leader in credit and information 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 comprehensive data and advanced analytics and decisioning. 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 33 countries around the world on five continents. www.transunion.com/business