More consumers with a monthly auto loan payment are paying their lender on time. The national rate for auto loans 60 days or more past due dropped 19.7 percent from the first quarter to 0.53 percent in the second quarter, according to credit scoring agency TransUnion.
Sixty-day car loan delinquencies in the second quarter were also down 27.4 percent when compared to the second quarter in 2009.
"The national trend we are seeing continues to point to a clear improvement in payment behavior," said Peter Turek, automotive VP in TransUnion’s financial services group. "Although part of the reason for the turnaround in delinquency rates is the influx of new, lower risk loans as we have noted before, consumers do not see a quick fix to the short term economic and employment situation and are focusing their attention instead on savings and lower consumption of discretionary goods."
"This movement toward fiscal responsibility is reflected in year-over-year results as auto delinquency rates now have dropped 27.4 percent since second quarter 2009 – the largest decline since the summer of 2001."
Although this is positive news for auto loan lenders and the economy, the trend may not continue. When looking at factors like disposable income, new car loan rates, unemployment rates and new vehicle registrations, TransUnion predicts that the national 60-day auto loan delinquency rates will creep up by the end of the year.
"Based on our current economic assumptions, TransUnion believes that the 60-day auto delinquency rate will continue to show seasonal patterns, but gradually drift upward, reaching a rate of around 0.6 percent by the fourth quarter of this year," Turek said.
Even at 0.6 percent, that means that less than 1 percent of all drivers with an auto loan payment are 60 days or more past due. Mortgages 60 days late totaled 6.67 percent, while 0.92 percent of credit cards were 90 days or more late.