05:02 AM

TransUnion: National Auto Loan Delinquency Rate Rises, Though Remains Relatively Low

CHICAGO, IL--(Marketwire - Nov 27, 2012) - The national auto loan delinquency rate (the ratio of borrowers 60 or more days past due) rose from 0.33% in Q2 2012 to 0.38% in Q3 2012, though it remains near historic low levels. One year ago, the auto loan delinquency rate was 0.47%. 

While auto loan delinquency rates remain relatively low, bank auto debt per borrower continued to rise, increasing 5% from $12,902 in Q3 2011 to $13,571 in Q3 2012.

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.

"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. "This has occurred even with auto loan delinquencies dropping 56% since the recession high of 0.86% set in the fourth quarter of 2008. Seasonal factors include consumers balancing increased spending due to back to school needs and holiday purchases." 

Between Q2 2012 and Q3 2012, 38 states experienced increases in their auto delinquency rates. However on a year-over-year basis only 7 states experienced increases in their auto delinquency rates. On a more granular level, 54% of metropolitan areas saw increases in their auto delinquency rates in Q3 2012. This is up from the prior period when 42% of MSAs experienced increases.

Auto loan originations also continue to increase. Total new auto loan and lease originations in Q2 2012 grew by approximately 16% relative to the same period last year. Auto loan originations are analyzed one quarter in arrears, to account for the reporting lag of new accounts.

The share of non-prime, higher-risk consumers (with a VantageScore® credit score lower than 700 on a scale of 501-990) was 32.8%. This is somewhat higher than one year ago (30.2% in Q2 2011), and is significantly higher than the 27.5% observed in Q2 2010. In volume terms, the number of new accounts originated to non-prime consumers increased 25.6% in Q2 2012 compared to Q2 2011. In addition, average balances for new auto loans increased by 2.4% in Q2 2012 relative to the same period last year, from $17,829 in Q2 2011 to $18,258 in Q2 2012. 

"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," said Turek. "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."

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.

Q3 2012 Bank Auto Statistics - Delinquency Rates

Quarter over Quarter   Q2 2012     Q3 2012     Pct. Change  
USA   0.33 %   0.38 %   15.15 %

Year over year   Q3 2011     Q3 2012     Pct. Change  
USA   0.47 %   0.38 %   (19.15 %)

Highest Bank Auto Delinquency States   Q3 2012  
Louisiana   0.82 %
Mississippi   0.75 %
West Virginia   0.63 %

Bank Auto Delinquency in Key States   Q3 2012  
California   0.43 %
Florida   0.46 %
Illinois   0.45 %
Michigan   0.27 %
New York   0.39 %
Texas   0.43 %

Top 3 Year-over-Year Increases   Q3 2011     Q3 2012     Pct. Change  
North Dakota   0.13 %   0.22 %   69.23 %
Vermont   0.27 %   0.37 %   37.04 %
Delaware   0.31 %   0.41 %   32.26 %

Q3 2012 Bank Auto Statistics - Bank Auto Debt Per Borrower

Quarter over Quarter   Q2 2012   Q3 2012   Pct. Change
USA   $ 13,427   $ 13,571   1.07%

Year over Year   Q3 2011   Q3 2012   Pct. Change
USA   $ 12,902   $ 13,571   5.19%

Highest Bank Auto Debt Per Borrower   Q3 2012
Texas   $ 15,529
Wyoming   $ 15,421
Alabama   $ 15,118

Bank Auto Debt Per Borrower in Key States   Q3 2012
California   $ 14,787
Florida   $ 14,123
Illinois   $ 13,128
Michigan   $ 12,439
New York   $ 12,646
Texas   $ 15,529

Top 3 Year-over-Year Increases   Q3 2011   Q3 2012   Pct. Change  
New Mexico   $ 12,767   $ 14,071   10.21 %
Texas   $ 14,200   $ 15,529   9.36 %
Oregon   $ 12,342   $ 13,375   8.36 %

Supporting Resources/Links

TransUnion Trend Data Interactive U.S. Map

TransUnion 2Q11 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