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TransUnion: Auto Loan Delinquency Rate and Debt Rise Again

CHICAGO, IL--(Marketwired - Nov 24, 2014) - Auto loan delinquency rates jumped nearly 13% in the last year to close Q3 2014 at 1.16%. At the same time, auto loan debt rose for the 14th straight quarter to $17,352. The latest TransUnion auto loan report also found that delinquency rates increased most for the youngest population subset with those under the age of 30 seeing a nearly 18% rise.

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.

The auto loan delinquency rate (the ratio of borrowers 60 days or more delinquent on their auto loans) increased to 1.16% in Q3 2014, up from 1.02% in Q3 2013. Auto loan delinquencies also experienced a quarterly increase due to seasonality from 0.98% in Q2 2014.

"The auto loan delinquency rate is rising, but it remains well below levels observed just a few years ago," said Peter Turek, automotive vice president for TransUnion. "With nearly five million more auto loan accounts reported in the last year and with continued sales strength in this sector, it's not unusual to see an increase in the delinquency rate. As long as delinquency rates remain around 1%, we don't anticipate seeing a material change in auto lending strategies."

All but two states -- Hawaii and Oklahoma -- experienced an increase in their auto loan delinquency rates between Q3 2013 and Q3 2014. The largest delinquency increases occurred in Nebraska, South Carolina and New Mexico.

TransUnion's analysis also found that auto loan delinquency rates increased across all age groups.

60+ Day Auto Loan Delinquency Rates for Various Age Groups
Age Range Q3 2013 Q3 2014 PCT. Change
Under 30 1.32% 1.55% 17.8%
30-39 1.37% 1.56% 13.8%
40-49 1.19% 1.35% 13.0%
50-59 0.51% 0.57% 12.0%
60+ 0.80% 0.88% 10.7%

Auto loan debt per borrower rose 3.9% from $16,694 in Q3 2013 to $17,352 in Q3 2014. On a quarterly basis, auto loan debt increased 1.4% from $17,108 in Q2 2014. Auto loan balances rose in every state between Q3 2013 and Q3 2014. Among the largest U.S. cities, Phoenix, Atlanta and Chicago saw the largest yearly auto loan debt rises of approximately 5%.

TransUnion recorded 64.2 million auto loan accounts as of Q3 2014, up from 59.4 million in Q3 2013. Viewed one quarter in arrears (to ensure all accounts are included in the data), new account originations increased to 6.93 million in Q2 2014, up from 6.55 million in Q2 2013.

The subprime delinquency rate (those consumers with a VantageScore® 3.0 credit score lower than 601) increased from 4.50% in Q3 2013 to 5.31% in Q3 2014. The share of non-prime, higher risk loan originations (with a VantageScore® 3.0 credit score lower than 661) grew by 14 basis points (from 36.39% in Q2 2013 to 36.53% in Q2 2014). This percentage is higher than what was observed five years ago near the end of the recession (31.67% in Q2 2009).

"We've been at an elevated state of subprime originations for several quarters, and the good news is that there has not been a material impact on the overall auto loan delinquency rate," said Turek. "The uptick in delinquency reflects a healthy and thriving auto finance industry where credit is more broadly available to all consumers."

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.

Q3 2014 Auto Loan Statistics - Consumer-Level Delinquency Rates

Quarter over Quarter Q2 2014Q3 2014 Pct. Change
USA 0.98%1.16% 18.4%
Year over year Q3 2013 Q3 2014 Pct. Change
USA 1.02% 1.16% 13.4%
Auto Loan Consumer Delinquency Rates for Select States Q3 2014 
California 0.84%
Florida 1.14%
Illinois 1.17%
New York 0.90%
Texas 1.37%
Largest Year-over-Year Increases Q3 2013  Q3 2014  Pct. Change 
Nebraska 0.67% 0.86% 27.6%
South Carolina 1.28% 1.57% 22.3%
New Mexico 1.40% 1.68% 20.3%
Largest Year-over-Year Declines Q3 2013  Q3 2014  Pct. Change 
Oklahoma 1.83% 1.62% (11.3%)

Q3 2014 Auto Loan Statistics - Auto Loan Debt Per Borrower

Quarter over Quarter Q2 2014 Q3 2014 Pct. Change 
USA $17,108 $17,352 1.4%
Year over Year Q3 2013 Q3 2014 Pct. Change 
USA $16,694 $17,352 3.9%



Auto Loan Debt per Borrower for Select States Q3 2014
California $17,483
Florida $17,437
Illinois $16,865
New York $15,154
Texas $21,937
Largest Year-over-Year Increases Q3 2013 Q3 2014 Pct. Change 
New Mexico $19,598 $20,801 6.1%
Arizona $18,041 $19,027 5.5%
Texas $19,164 $20,203 5.4%
Largest Year-over-Year Declines Q3 2013 Q3 2014 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.