TransUnion Recognizes A Decrease In Car Loan Late Payments

Some much-needed good news has come down the vehicle industry news expressway, reports the Wall Street Journal. That's because a TransUnion study has indicated that delinquency rates for consumer auto loans that are at least 60 days past due decreased substantially in the second quarter of 2010. This welcome sign of recovery was a nice addition to TransUnion's previous finding that the number of credit card late payments had also waned.

Customers who turn out to be savers slow the transformation

Automobile purchasing has been slow down to pick up, thinking about that so many consumers are focusing on saving to live via the economic recession. Peter Turek of TransUnion sees a silver lining to the economic dark cloud when it comes to the diminished late payment rate.

"Although part of the reason for the turnaround in delinquency quotes is the influence of new, lower risk loans, consumers don't see a quick fix to the short-term economic and employment situation," exclaimed Turek.

Quarter 2 results were 20% better than first quarter

Consumers 60 days late or more on their vehicle loans fell by .53. According to the Journal, this was a 20 percent over Q1 delinquency rates. It's the largest decrease since the summer of 2001, writes the Journal. Rhode Island, Montana and Utah were the only states to show an increase in the 60-day delinquency rate, while Vermont was the biggest loser. Vermont's missed payments went down nearly 50 percent, from 1 percent to .58 percent. In the category of "It's costly to live in paradise," Hawaii showed the greatest drop within the origination of vehicle loans. The reason could be the complete expense of living in Hawaii. It makes holding onto old cars an attractive proposition.

In spite of the good news, TransUnion's experts predict a .6 percent increase in delinquency by the fourth quarter. The probable cause would be the anticipated weight of holiday spending.

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Wall Street Journal

online.wsj.com/article/BT-CO-20100830-703526.html

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Tagged as: auto loans, automotive market, delinquency rates, transunion