The national 60-day auto delinquency rate declined nearly 18 percent between the fourth quarter of 2007 and the first quarter of 2008, from 0.79 percent to 0.65 percent, reports Dealer Magazine.
The rate drop is according to a TransUnion.com analysis of trends in the auto lending industry for the first quarter of 2008. The 18 percent drop is the steepest in four years.
Auto loan delinquency (the ratio of borrowers 60 or more days past due) was highest in Louisiana at 1.19 percent, followed by Alabama at 1.07 percent. The lowest auto loan delinquency rates were found in North Dakota (0.30 percent), Montana (0.35 percent) and Wyoming (0.37 percent).
Another section of the analysis measured trends in auto debt levels. Average auto debt nationally rose 0.75 percent in the first quarter of 2008 to $12,833. The highest increases in average auto debt occurred in Alabama (4.2 percent growth), Louisiana (2.9 percent) and Maine (2.6 percent), while the District of Columbia experienced the biggest drop in average auto debt (-4.0 percent) followed by Hawaii (-2.2 percent).
For auto debt, the largest state average was in Nevada at $16,034 followed by Arizona at $15,272. The lowest average auto debt was in Michigan at $10,610.
"The availability of home equity for financing auto purchases has diminished significantly in states like Nevada and Arizona, thus contributing to higher auto loan debt," said Peter Turek, automotive vice president in TransUnion’s financial services group.
"Even states that have the highest 60-day delinquency rates like Louisiana and Alabama have shown a decrease over the prior quarter. According to the IRS, individual income tax refunds were larger (up 3.5 percent) and consumers filed earlier than in the previous year. It is plausible the tax refunds from the government are helping consumers with their debt burden."