10:07 AM

TransUnion: National Auto Loan Delinquency Rates Remain Flat to Close 2010

The national 60-day auto delinquency rate (the ratio of auto loan borrowers 60 or more days past due) remained relatively flat, edging upward only by smallest of margins (1.72 percent) between the third (0.58 percent) and fourth quarters of 2010 (0.59 percent), according to a TransUnion quarterly analysis of trends in the auto industry. However, the year-over-year delinquency rate at the national level fell by 27.2 percent in the fourth quarter as the variable stood at 0.81 percent at the end of 2009. 

Q4 2010Quarterly Auto Statistics

  • Auto loan delinquency was highest in Louisiana and Mississippi at 1.08 percent and 1.04 percent, respectively. The lowest auto loan delinquency rates were found in North Dakota (0.24 percent), Michigan (0.34 percent) and Minnesota (0.35 percent).

  • Largest improvements in delinquency from the previous quarter were found in the District of Columbia (22.1 percent decrease from 0.95 percent) and New Hampshire (17.6 percent decrease from 0.51 percent).

  • Auto loan delinquency rates rose in 32 states since the third quarter of 2010 -- Wyoming came in at 0.45 percent (a 95.7 percent increase), New Mexico at 0.82 percent (a 49.1 percent increase), and Idaho at 0.74 percent (45.1 percent increase).

  • On a national basis, average auto debt per borrower rose slightly quarter over quarter from $12,500 to $12,602. Year-over-year, auto debt remained essentially flat in the fourth quarter of 2010.

  • Borrowers residing within the District of Columbia hold the largest average auto debt burden at $15,693, followed by Wyoming at $14,217. The lowest average auto debt per borrower was in Nebraska at $10,998.

  • States with the steepest quarterly increases in average auto debt on a percentage basis were Utah (+3.4 percent), the District of Columbia (+3.1 percent) and North Dakota (+2.9 percent). Nebraska experienced the sharpest drop in average auto debt (-1.3 percent), followed by Wyoming (-1.1 percent).

  • Year-over-year, national bank auto originations increased by 28 percent -- marking the fourth consecutive quarter of growth.

Analysis and Supporting Quotes

"As expected, the national delinquency rate changed very little during the fourth quarter as this period typically exhibits the least amount of seasonality. The good news is that TransUnion expects national auto delinquency rates to continue to be well below the peak of 0.86 percent -- a rate experienced during the heart of the recession in the fourth quarter of 2008. This trend toward fiscal responsibility is reflected in year-over-year results, as auto delinquency rates now have dropped 27.2 percent since fourth quarter 2009. On a state-level basis, 18 states experienced a drop in their quarter-to-quarter delinquency rates, while only 3 states showed an increase on a year-over-year basis."

Peter Turek, automotive vice president in TransUnion's financial services group

Auto Delinquency Forecast

TransUnion forecasts that the 2011 auto loan delinquency rate, which is the ratio of auto loan borrowers 60 or more days past due, will continue to experience seasonal ups and downs -- falling to 0.48 percent by mid-year and increasing to 0.56 percent at the conclusion of 2011.

"Since the beginning of the recession, TransUnion's national and state forecasting models have accurately tracked the national 60-day auto delinquency rates, which are impacted by economic factors such as per capita disposable income, interest rates for new car loans, unemployment rates, and new vehicle registrations.

"Our forecast for the fourth quarter of 2011 is that auto delinquency will reach a rate near 0.6 percent. Based on our current economic assumptions, TransUnion believes that the 60-day auto delinquency rate will continue to follow seasonal patterns and gradually begin to stabilize throughout 2011."

Peter Turek, automotive vice president in TransUnion's financial services group

Q4 2010 Overview of U.S. Consumer Credit Status

  • TransUnion's quarterly analysis of trends in the mortgage industry found that the national mortgage loan delinquency rate (the ratio of borrowers 60 or more days past due) decreased for the fourth consecutive quarter at the end of 2010, dropping to 6.41 percent. This statistic, which is traditionally seen as a precursor to foreclosure, reflects a decrease of 0.47 percent from the third quarter of 2010 (6.44 percent), and is the smallest decline since the recession ended in the summer of 2009. Year-over-year, mortgage borrower delinquency is down approximately 7 percent (from 6.89 percent in the fourth quarter 2009). 

  • The average national mortgage debt per borrower again decreased (0.59 percent) to $189,046 from the previous quarter's $190,176. On a year-over-year basis, the fourth quarter 2010 average represents a 2.4 percent decrease over the fourth quarter 2009 average mortgage debt per borrower level of $193,690.

  • TransUnion's quarterly analysis of trends in the credit card industry revealed that the national credit card delinquency rate (the ratio of bankcard borrowers 90 days or more delinquent on one or more of their bank-issued credit cards) decreased to 0.82 percent in the fourth quarter of 2010, down almost 32 percent year-over-year. With the economic recovery in full swing, the decrease in the ratio of bank card borrowers delinquent has flattened out considerably; compared to last quarter, credit card delinquencies edged downward by only 1.2 percent.

  • National average credit card borrower debt (defined as the aggregate balance on all bank-issued credit cards for an individual bankcard borrower) remained flat in the fourth quarter, increasing by only one dollar to $4,965 from the previous quarter's $4,964. On a year-over-year basis, average cardholder debt was down 8.62 percent.

Supporting Resources/Links

TransUnion Trend Data Interactive U.S. Map

TransUnion Payment Hierarchy Study

TransUnion Value of Loyalty/Delinquency 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, auto loan and mortgage 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. For the purpose of this analysis, the term "credit card" refers to those issued by banks.

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 employs associates in more than 25 countries on five continents. www.transunion.com/business