(LoanSafe.org) The national 60-day auto delinquency rate (the ratio of auto loan borrowers 60 or more days past due) showed no change between the third and fourth quarters of 2009 (0.81 percent), according to a TransUnion quarterly analysis of trends in the auto industry. The year-over-year delinquency rate at the national level decreased by 5.81 percent in the fourth quarter.
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 quarterly from approximately 27 million anonymous, randomly sampled, individual credit files, representing approximately 10 percent of credit-active U.S. consumers and providing a real-life perspective on how they are managing their credit health.
Auto loan delinquency was highest in Mississippi and Alabama at 1.45 percent and 1.39 percent, respectively. The lowest auto loan delinquency rates were found in Alaska (0.29 percent), North Dakota (0.32 percent) and South Dakota (0.41 percent). The largest improvements in delinquency from the previous quarter were found in Alaska (35.6 percent decrease from 0.45 percent) and Idaho (28 percent decrease from 0.67 percent).
Average auto debt nationally increased slightly between the third and fourth quarters of 2009 from $12,542 to $12,568. The year-over-year auto debt fell by 1.1 percent. The state with the largest auto debt burden was Nevada at $14,376, followed by Texas at $14,372. The lowest average auto debt was in Nebraska at $10,738. The states with the steepest annual increases in average auto debt as a percentage were Michigan (+3.47 percent), Tennessee (+1.6 percent) and Montana (+1.56 percent). New Mexico experienced the sharpest drop in average auto debt (-3.0 percent) followed by Nevada (-2.3 percent).
“Going against traditional seasonal patterns, the flattening of auto delinquency rates in the fourth quarter may be an optimistic sign for payment behavior over the remainder of this year,” said Peter Turek, automotive vice president in TransUnion’s financial services business unit. “Since 2000, auto delinquency rates have increased in the fourth quarter except for one occasion back in 2003. In fact, at the start of the recession (fourth quarter of 2007), the auto delinquency rate increased nearly 15 percent from the prior quarter. Part of the reason why we may be seeing a gradual turnaround in delinquency rates is the impact of new lower risk loans over the past several quarters including new loans from the popular government program, Cash for Clunkers.”
On a state-level basis, 18 states experienced a drop in their quarter-to-quarter delinquency rates while 35 showed a drop on a year-over-year basis.
TransUnion’s national 60-day auto delinquency rate forecast has been revised downward over the course of the current year. TransUnion projects auto delinquencies to be in the range of 0.75 and 0.80 percent by year’s end.
“Given a more positive outlook for GDP and other economic indicators except for employment, our current forecasting models point to a national 60-day auto delinquency rate of 0.65 percent by midyear, a decrease of 19.7 percent compared to fourth quarter 2009,” said Turek. “However, the seasonality and forecast of car sales will influence delinquency throughout the rest of this year and into 2011.”
Overview of U.S. Consumer Credit Status – Fourth quarter 2009
— Mortgage loan delinquency (the ratio of borrowers 60 or more days past due) increased for the 12th straight quarter, hitting an all-time national average high of 6.89 percent for the fourth quarter of 2009. This quarter marks the first time the mortgage delinquency rate increase did not decelerate after doing so for three consecutive periods. This statistic, which is traditionally seen as a precursor to foreclosure, increased 10.24 percent from the previous quarter’s 6.25 percent average. Year-over-year, mortgage borrower delinquency is up approximately 50 percent (from 4.58 percent).
— The average national mortgage debt per borrower increased (0.29 percent) to $193,690 from the previous quarter’s $193,121. On a year-over-year basis, the fourth quarter 2009 average represents a 0.47 percent increase over the fourth quarter 2008 average mortgage debt per borrower level of $192,789, which further suggests stabilization in housing prices, traditionally seen as a key ingredient for a sustained economic recovery.
— The national credit card delinquency rate (the ratio of bankcard borrowers 90 days or more delinquent on one or more of their credit cards) increased to 1.21 percent in the fourth quarter of 2009, up 10 percent over the previous quarter. Year over year, credit card delinquencies remained flat.
— Average credit card borrower debt (defined as the aggregate balance on all bank-issued credit cards for an individual bankcard borrower) drifted downward nationally by 3.18 percent to $5,434 from the previous quarter’s $5,612, and down 5.15 percent compared to the fourth quarter of 2008 ($5,729).
TransUnion’s Trend Data database
The source of the underlying data used for this analysis is 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.
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
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