Experian Automotive: 60-Day Delinquencies on the Rise
Schaumburg, Ill. — Sixty-day auto loan delinquencies rose for the first time since 2009, but the overall lending market is healthy, according to an industry-wide analysis by Experian Automotive.
Experian found that 60-day delinquencies rose from 0.72 percent in the fourth quarter 2011 to 0.74 percent in the end-of-year quarter last year. Thirty-day delinquencies showed a slight decline, dropping from 2.79 percent to 2.72 percent in the same period. It was the first time since the fourth quarter 2099 that either 30- or 60-day loan delinquencies experienced a year-over-year rise.
“You never want to see an increase in delinquencies, but when you take a step back and look at the market compared to where it was three years ago, we still have remarkable stability,” said Melinda Zabritski, director of automotive credit for Experian Automotive.
Banks, captives and credit unions all realized slight drops in 30-day delinquencies. Finance companies, typically lenders for credit-challenged customers, saw their 30-day delinquencies rise from 5.35 percent in the fourth quarter 2011 to 5.61 percent in 2012’s end-of-year quarter.
The total balance of 60-day delinquent loans grew from $3.48 billion in the fourth quarter 2011 to $3.93 billion in the fourth quarter 2012. However, from the standpoint of growth as a percentage of the total market, 60-day delinquent loans grew from 0.53 percent in the fourth quarter 2011 to 0.55 percent in the fourth quarter 2012.
Overall, the lending market remains stable compared to 2009’s end-of-year quarter. Sixty-day delinquencies were down in comparison from 0.94 to 0.74 in the fourth quarter 2012, while 30-day delinquencies were down from 3.30 to 2.72 percent.
The analysis also found that quarterly repossession rates fell 27.6 percent, dropping from 0.63 percent in the fourth quarter 2011 to 0.46 percent in the fourth quarter 2012. Quarterly repossession rates for banks, credit unions, captives and finance companies all fell as well, with finance companies showing the sharpest decline (34.7 percent), dropping 2.47 percent to 1.61 percent in the fourth quarter 2012 vs. the year-ago period.
Additionally, overall charge-off amounts rose from $6,815 in the fourth quarter 2011 to $7,277 in the fourth-quarter 2012, but still remain below prerecession levels ($8,660 in Q4 2007).
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