CHICAGO -

TransUnion explained why a rise in delinquencies within the subprime segment of the auto financing market reflects a “healthy” condition.

Analysts indicated the subprime delinquency rate — those consumers with a VantageScore 3.0 credit score lower than 601 — increased from 4.50 percent in the third quarter of last year to 5.31 percent in the third quarter of this year.

TransUnion also pointed out the share of non-prime, higher risk loan originations — with a VantageScore 3.0 credit score lower than 661 — grew by 14 basis points from 36.39 percent in Q2 of 2013 to 36.53 percent in Q2 2014. The credit bureau mentioned this percentage is higher than what was observed five years ago near the end of the recession when it stood at 31.67 percent in Q2 2009.

For finance company executives and industry observers who might be thinking that any type of delinquency rise is cause for alarm, TransUnion automotive vice president Peter Turek described his thinking when the credit bureau released its latest data on Monday.

“We’ve been at an elevated state of subprime originations for several quarters, and the good news is that there has not been a material impact on the overall auto loan delinquency rate,” Turek said.

“The uptick in delinquency reflects a healthy and thriving auto finance industry where credit is more broadly available to all consumers,” he continued.

The delinquency rate not only climbed in the subprime space, but TransUnion also noticed it moved higher year-over-year when looking at the entire market, too.

Analysts determined auto loan delinquency rates jumped nearly 13 percent in the last year to close Q3 2014 at 1.16 percent. At the same time, auto loan debt rose for the 14th straight quarter to $17,352.

The latest TransUnion auto loan report also found that delinquency rates increased most for the youngest population subset with those under the age of 30 seeing a nearly 18-percent rise.

The data provided is gathered from TransUnion's proprietary Industry Insights Report (IIR), a quarterly overview summarizing data, trends and perspectives on the U.S. consumer lending industry. The report is based on anonymized credit data from virtually every credit-active consumer in the United States.

The auto loan delinquency rate (the ratio of borrowers 60 days or more delinquent on their auto loans) increased to 1.16 percent in Q3 2014, up from 1.02 percent in Q3 2013. Auto loan delinquencies also experienced a quarterly increase due to seasonality from 0.98 percent in Q2 2014, according to the credit bureau’s data.

“The auto loan delinquency rate is rising, but it remains well below levels observed just a few years ago,” said Turek, who was one of the many experts on hand during the SubPrime Forum at Used Car Week.

“With nearly 5 million more auto loan accounts reported in the last year and with continued sales strength in this sector, it’s not unusual to see an increase in the delinquency rate,” he continued.

“As long as delinquency rates remain around 1 percent, we don’t anticipate seeing a material change in auto lending strategies,” Turek went on to say.

Analysts discovered all but two states — Hawaii and Oklahoma — experienced an increase in their auto loan delinquency rates between Q3 2013 and Q3 2014. The largest delinquency increases occurred in Nebraska, South Carolina and New Mexico.

TransUnion's analysis also found that auto loan delinquency rates increased across all age groups.

Auto loan debt per borrower rose 3.9 percent from $16,694 in Q3 2013 to $17,352 in Q3 2014. On a quarterly basis, auto loan debt increased 1.4 percent from $17,108 in Q2 2014.

Auto loan balances rose in every state between Q3 2013 and Q3 2014. Among the largest U.S. cities, Phoenix, Atlanta and Chicago saw the largest yearly auto loan debt rises of approximately 5 percent, according to analysts.

TransUnion recorded 64.2 million auto loan accounts as of Q3 2014, up from 59.4 million in Q3 2013. Viewed one quarter in arrears (to ensure all accounts are included in the data), new account originations increased to 6.93 million in Q2 2014, up from 6.55 million in Q2 2013.