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TransUnion: National Auto Loan Delinquency Rate Hits New Record Low for Second Consecutive Quarter

CHICAGO, IL--(Marketwire - Aug 21, 2012) - For the second consecutive quarter, the national auto loan delinquency rate (the ratio of borrowers 60 or more days past due) hit its lowest level since TransUnion began tracking the data in 1999. Auto loan delinquency rates in Q2 2012 dropped to 0.33%, down from 0.36% Q1 2012. On a year-over-year basis, auto loan delinquencies declined 25% from 0.44% in Q2 2011. 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.

"It's not surprising that auto loan delinquencies remain at record low levels," said Peter Turek, automotive vice president in TransUnion's financial services business unit. "A recent TransUnion study found that consumers now value their auto loans more than their credit cards and mortgages. This is partly due to the need for transportation to get to work or to seek employment in a difficult job market. Additionally, consumers with car loans have more equity in their vehicle than they have in the recent past because of the strong used car vehicle market. Consumers want to keep their auto loan relationships in good standing."

In addition to increased demand in new and used autos, bank auto debt per borrower has risen nearly 6% from $12,689 in Q2 2011 to $13,427 in Q2 2012. Despite growing bank auto debt, the majority of states and cities are experiencing declines in their auto loan delinquency rates.

Between Q1 2012 and Q2 2012, 37 states experienced declines in their auto delinquency rates. On a more granular level, 58% of metropolitan areas saw decreases in their auto delinquency rates in Q2 2012. This is down from the prior period where 66% of MSAs experienced decreases.

"It's impressive to see auto loan delinquencies remain so low despite a growing proportion of new loans going to non-prime consumers," added Turek.

In Q2 2012 on a year-over-year basis, the percentage of new auto loans to non-prime borrowers (with a VantageScore® credit score lower than 700 on a scale of 501-990) increased by 9%. In the last two years (between Q2 2010 and Q2 2012), the percentage of new auto loans to non-prime borrowers has increased more than 20%.

"With the increase in non-prime borrowing, we do anticipate that auto loan delinquencies will begin to increase," said Turek. "We are at such a low auto loan delinquency level -- far from normal standards -- that a slight rise through the end of the year should be expected, though the overall rate will likely remain relatively low."

TransUnion's forecast is based on various economic assumptions, such as unemployment rates, consumer sentiment, disposable income, and interest rates. The forecast changes as the economy deviates from a conservative forecast or if there are unanticipated shocks to the economy affecting recovery.

Q2 2012 Bank Auto Statistics - Delinquency Rates

Quarter over Quarter   Q1 2012     Q2 2012     Pct. Change  
  USA   0.36 %   0.33 %   (8.33 %)
Year over year   Q2 2011     Q2 2012     Pct. Change  
  USA   0.44 %   0.33 %   (25.00 %)

Highest Bank Auto Delinquency States Q2 2012  
  Louisiana 0.60 %
  Mississippi 0.60 %
  Oklahoma 0.55 %
Bank Auto Delinquency in Key States Q2 2012  
  California 0.37 %
  Florida 0.41 %
  Illinois 0.39 %
  Michigan 0.21 %
  New York 0.30 %
  Texas 0.36 %

Top 3 Year-over-Year Increases   Q2 2011     Q2 2012     Pct. Change  
  Delaware   0.31 %   0.45 %   45.16 %
  Idaho   0.19 %   0.26 %   36.84 %
  Montana   0.24 %   0.25 %   4.17 %

Q2 2012 Bank Auto Statistics - Bank Auto Debt Per Borrower

Quarter over Quarter   Q1 2012   Q2 2012   Pct. Change  
  USA   $ 13,272   $ 13,427   1.17 %
Year over Year     Q2 2011     Q2 2012   Pct. Change  
  USA   $ 12,689   $ 13,427   5.82 %

Highest Bank Auto Debt Per Borrower   Q2 2012
  Texas   $ 15,232
  Louisiana   $ 14,973
  Alabama   $ 14,960
Lowest Bank Auto Debt Per Borrower     Q2 2012
  Nebraska   $ 11,614
  Ohio   $ 11,965
  Kansas   $ 12,154

Top 3 Year-over-Year Increases   Q2 2011   Q2 2012   Pct. Change  
  Oregon   $ 11,788   $ 13,094   11.07 %
  Louisiana   $ 13,662   $ 14,973   9.60 %
  Idaho   $ 11,382   $ 12,471   9.57 %
Top 3 Year-over-Year Declines     Q2 2011     Q2 2012   Pct. Change  
  New Jersey   $ 13,953   $ 13,888   (0.46 %)
  Hawaii   $ 14,658   $ 14,615   (0.29 %)

Note: Only two states experienced year-over-year declines

Supporting Resources/Links

TransUnion Trend Data Interactive U.S. Map

TransUnion 1Q11 Auto Statistics

TransUnion Mortgage Loan Modification Study

TransUnion Payment Hierarchy Study

TransUnion Deleveraging Analysis

TransUnion Life After Foreclosure Study

TransUnion on Twitter

TransUnion's Trend Data database

The report is part of an ongoing series of quarterly consumer lending sector analyses focusing on credit card, bank auto loan and bank auto data available on TransUnion's Web site. Information for this analysis is culled from TransUnion's Trend Data and the anonymous credit files of approximately 10 percent of credit-active U.S. consumers, providing a real-life perspective on how they are managing their credit health.

TransUnion's Trend Data, a one-of-a-kind database consisting of 27 million anonymous consumer records randomly sampled every quarter from TransUnion's national consumer credit database. Each record contains more than 200 credit variables that illustrate consumer credit usage and performance. Since 1992, TransUnion has been aggregating this information at the county, Metropolitan Statistical Area (MSA), state and national levels.

About TransUnion

As a global leader in information and risk 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 high quality data, and integrating advanced analytics and enhanced decision-making capabilities. 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 32 countries around the world. www.transunion.com/business