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Delinquent Car Loans Reach All-Time Highs

Record-setting fourth quarter followed record-setting third quarter.

by on Feb.17, 2017

New car sales set a new record this year. Car loan delinquencies also hit a record high in 2016.

The rate and amount of delinquent auto loans has climbed to its highest level since the end of 2008 when the U.S. was teetering on the edge of tbe Great Recession.

Car loans delinquent by 30 days or more grew to $23.27 billion, the most since $23.46 billion in the third quarter of 2008. They were up from $22.98 billion in the prior quarter. Roughly 3.8% of the loans were delinquent at the end of the fourth quarter, which is up from 3.6% at the end of the third quarter, according to data on consumer debt collected by the Federal Reserve Bank of New York.

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Seriously delinquent auto loans whose payments were 90 days or more past due jumped to $8.24 billion in the fourth quarter, which was just an extension of the third quarter of last year, when the previous high was set, according to the survey. (more…)

Fewer Car Buyers Late on Loans

by on May.31, 2011

Lenders lossen credit, but delinquencies and defaults still decline, reports TransUnion.

Whether it’s a sign of an improved economy may be unclear, but the number of consumers late in paying their car loans has fallen to the lowest level since 1999, and is nearing an all-time low.

The number of car buyers 60 days or more behind in their payments has plunged to just 0.49%, or less than one in 200, nearing the lowest figure ever recorded by credit reporting agency TransUnion.  By comparison, the figure stood at 0.66% during the first quarter of 2010.

Meanwhile, the number of auto loans started during the first quarter of 2011 increased by 22%, tracking with the overall increase in U.S. new car sales this year.

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The agency reported that the highest number of auto delinquencies for the quarter were in Mississippi, Louisiana and Oklahoma, while the lowest were found in Montana, Washington, D.C. and Wyoming.

Low interest rates – often subsidized by manufacturers hoping to spur demand may be a factor in current loan trends.  Other factors TransUnion cited include a stronger automotive market and higher consumer confidence.

(more…)