SCHAUMBURG, Ill. -

More subprime paper in finance company portfolios nowadays is continuing to push delinquencies higher.

Experian Automotive determined both 30- and 60-day auto loan delinquencies climbed during the third quarter of 2014. According to its latest State of the Automotive Finance Market report, 30-day delinquencies grew 3.7 percent from the previous year.

Similarly, 60-day delinquencies jumped 8.6 percent during the same time period.

“While we have observed a rise in delinquencies over the past few quarters, it was to be expected due to the growth in subprime loans. We have to keep in mind that a majority of the market is still in the prime risk category,” said Melinda Zabritski, Experian’s senior director of automotive credit who gave a preview of this data when she conducted the opening session of the SubPrime Foum at Used Car Week in Las Vegas.

“As long as consumers continue to do a good job of making their auto-loan payments on time and lenders keep a close eye on how rates fluctuate year over year, the industry should remain relatively stable,” Zabritski continued.

“Understanding the shifts in payment behavior and the industry’s risk tolerance are important for the market because these insights can trigger actions that affect vehicle prices, loan terms or interest rates,” she went on to say.

As top players in the subprime space already might have surmised, further findings from the report showed that states in the South accounted for four of the top five highest delinquency rates in both the 30- and 60-day category.

On the flip side, the states with the lowest delinquency rates in both categories primarily resided in the Midwest and Northwest regions.

30-day Delinquency Rates by State
 Highest
Delinquency Rate
   Lowest
Delinquency Rate
 
 Mississippi   4.49%  North Dakota  1.18%
 Washington D.C.  4.02%  South Dakota  1.43%
 Louisiana  3.71%  Minnesota  1.49%
 South Carolina  3.66%  Oregon  1.50%
 Alabama  3.49%  Alaska  1.54%

 

60-day Delinquency Rates by State
 Highest
Delinquency Rate
   Lowest
Delinquency Rate
 
 Washington D.C.  1.42%  North Dakota  0.27%
 Mississippi  1.36%  Alaska  0.36%
 Louisiana  1.16%  Oregon  0.37%
 Alabama  1.05%  South Dakota  0.42%
 New Mexico  1.01%  Idaho  0.42%

Other findings from Experian latest report include:

• Total balances for all open automotive loans grew to $870 billion, up from $784 billion a year ago.

• Finance companies saw the highest percentage increase in total dollar volume, jumping 19.6 percent to $134 billion.

• Super-prime loans accounted for 20.6 percent of total loans in Q3 2014, up from 20.26 percent the prior year. At the opposite end of the spectrum, deep subprime grew from 3.57 percent to 3.84 percent.