According to TransUnion’s annual auto loan forecast, the national auto loan delinquency rate will increase about seven percent to 0.92 percent by the end of 2010. The 60-day delinquency rate is expected to be at 0.86 percent at the end of 2009.
“Our forecast indicates we will see auto loan delinquencies drop in the first and second quarters of 2010 due to many factors such as ‘cash for clunkers’ and tightening lending standards,” said Peter Turek, automotive vice president in TransUnion’s financial services group. “Delinquencies will rise in the second half of 2010 as economic pressures, along with traditional spending patterns of summer vacations, back to school and the holidays, will continue to strain consumers. While the rate of increase should be relatively mild, it is a cautionary number to those expecting an abrupt turnaround in the auto finance industry.”
In California, car loan delinquencies are predicted to decline by the end of next year from 1.40 percent to 1.35 percent. TransUnion said in a statement that other states that have been hit hard by the mortgage crisis look to be slowly improving their automotive credit picture as many auto loans reach maturity. Florida and Nevada are two of the top 10 states expected to see the least amount of increase in auto loan delinquencies.
By the end of 2010, the states predicted to have the highest car loan delinquencies are Mississippi, Georgia and Alabama. States expected to have the lowest auto loan delinquencies at the end of next year include The District of Columbia, North Dakota and South Dakota.