Auto loan delinquencies are up and nearly $25 billion in auto loans are past due, according to Experian Automotive. Is this surprising to anyone? People can barely make their mortgage payments every month so it’s no shocker that they are choosing to pay their car payments late.
Experian Automotive’s overview of automotive lending trends focused on a quarterly analysis of the market from the second quarter of 2006 through the second quarter of 2008.
Experian found that loans 30 days past due were up 9 percent year-over-year in the second quarter of 2008, while loans 60 days past due were up 11 percent. Currently, 2.48 percent of all automotive loans are 30 days past due, compared with 2.28 percent in the second quarter of 2007. Automotive loans 60 days past due are up 0.75 percent from 0.67 percent.
"The economy continues to force lenders to tighten their loan criteria while consumers are faced with increased difficulty in repaying those loans on time," said Scott Waldron, president of Experian Automotive. "Our data has shown a clear pattern of rising past-due loans in the auto industry, where even a slight increase in delinquent loans severely affects the industry by accounting for hundreds of millions of dollars in unpaid debt."
Experian also found that the percentage of those with prime automotive loans (people with a 680 and above credit score) fell by 8 percent.