U.S. motorists seem to be getting a grip on their household budgets and are doing a better job of getting auto loan payments in on time.
The auto delinquency rate took a sharp rise in recent years, a reflection of the worsening economy – and a mirror of the increased mortgage default rate. In turn, that led lenders such as the former GMAC, to tighten down on auto loan availability. At one point, in the latter half of 2008, it took a nearly perfect credit score to secure a loan from a General Motors dealer.
But industry officials report that lenders are again loosening up, at least a bit, and a declining delinquency rate is one major factor. According to TransUnion, one of the three big credit reporting agencies in the U.S., the late loan payment rate dropped to 0.53% during the second quarter of this year, down from 0.73% during the April – June period in 2009.
As is normal, rates varied widely across the country, from a minimal 0.28% in North Dakota to 1.05% in Mississippi. But, significantly, the delinquency rate rose in only three states, Rhode Island, Utah and Montana.