Consumers are going to continue to ramp up their auto loan debt in 2015 while delinquencies are projected to tick higher, too.

That’s the two main segments of TransUnion’s annual auto loan forecast that calls for auto loan debt to rise to $18,244 at the end of 2015. That forecast would mark 19 consecutive quarters of increases since Q1 of 2011, when auto loan debt per borrower stood at $14,954.

The TransUnion forecast also calls for the national auto loan delinquency rate — the ratio of borrowers 60 or more days past due — to end this year at 1.20 percent, and increase slightly to 1.27 percent at the close of next year.

“We expect the auto loan market to continue to perform exceptionally well in 2015, with more sales leading to continued increases in auto loan debt per borrower as the national portfolio gets younger on average,” said Peter Turek, automotive vice president in TransUnion’s financial services business unit.

“We anticipate the economy to continue to improve next year, with a better employment picture helping the auto industry,” Turek continued. “While the auto loan delinquency rate has slowly risen to a point where it will be above 2010 levels, we are still far off the peaks observed in 2008 and 2009 when delinquencies were more than 30 basis points higher.”

Since 2007, TransUnion indicated the auto loan delinquency rate has been as low as 0.86 percent in Q2 of 2012 and as high as 1.59 percent in Q4 of 2008.

On average, analysts determined the delinquency rate during the fourth quarter between 2007 and 2013 was 1.29 percent.

While delinquency levels for subprime borrowers have grown from 4.2 percent in Q3 of 2012 to 4.5 percent in Q3 of 2013 to 5.3 percent in Q3 of this year, TransUnion pointed out the contribution of this segment to the overall delinquency rate has been muted because their share has remained between 14 percent and 15 percent during this timeframe.

Turek noted the subprime share of balances previously peaked in 2009 at just above 22 percent.

Looking further back, TransUnion’s data showed the number of subprime borrower accounts are 1.6 million fewer in the third quarter of this year than the same quarter seven years ago before the recession.

Meanwhile, Turek emphasized the number of auto loan accounts rose approximately 4 million in that same timeframe.

“The auto loan market has been especially strong for lenders, as much of the growth observed in the last few years has come from prime or better risk tiers,” Turek said.

“There is room for growth in the subprime sector as evidenced by more competition,” he continued. “Prior to the recession the percent of subprime auto balances were nearly 5 percent higher than they are now.” 

On a state level, TransUnion said auto loan delinquency rates are expected to rise in 38 states with the largest increases occurring in Rhode Island (up 11 percent), Colorado (up 11 percent), Utah (up 9 percent) and Florida (up 7 percent).

 The biggest percentage declines are expected in Alaska (down 5 percent), Wyoming (down 3 percent) and Maryland (down 2 percent).

TransUnion went on to mention auto loan debt is expected to rise in every state and the District of Columbia, with largest increases occurring in Michigan (up 8 percent), Missouri (up 7 percent), Georgia (up 6 percent) and Arizona (up 6 percent). 

TransUnion’s forecasts are based on various economic assumptions, such as gross state product, consumer sentiment, unemployment rates and real estate values.

“The forecasts would change if there were unanticipated shocks to the economy, such as if home prices unexpectedly fall. Better-than-expected improvements in the economy, such as precipitous drops in unemployment, could also impact these forecasts,” TransUnion said.

Editor’s Note: Watch for the January/February print and digital editions of SubPrime Auto Finance News for more 2015 projections from TransUnion as well as other industry observers.