TransUnion.com: Annual 60-Plus Day Auto Delinquency Climb to Continue
CHICAGO — On Monday, TransUnion.com released its third-quarter analysis of auto lending trends.
TransUnion.com found that the national 60-day auto delinquency rate (the ratio of auto loan borrowers 60 or more days past due) increased between the second and third quarter of 2008 from 0.68 percent to 0.80 percent. Additionally, on a year-over-year basis, the delinquency rate increased 15.9 percent in the third quarter.
Auto loan delinquencies were highest in Mississippi at 1.46 percent, followed by Louisiana at 1.41 percent.
On the other hand, the lowest auto loan delinquency rates were found in Wyoming (0.29 percent), North Dakota (0.36 percent) and South Dakota (0.46 percent), according to the company.
The largest improvements over the previous quarter were discovered in Wyoming (29-percent decrease from 0.41 percent) and South Dakota (16-percent decrease from 0.55 percent).
Average auto debt nationally decreased slightly in the third quarter from $12,869 to $12,861.
However, an annual comparison of auto debt showed it increased 1.1 percent. The state with the largest auto debt burden was in Nevada at $15,773, followed by the District of Columbia at $15,433.
At the other end of the spectrum the lowest average auto debt was in Nebraska at $10,944.
The steepest increases in average auto debt as a percentage occurred in Iowa (3.2-percent growth), Nebraska (2.5 percent) and Wisconsin (2.2 percent), while Utah experienced the sharpest drop in average auto debt (-1.7 percent), followed by Nevada (-1.6 percent), executives explained.
Basically, officials indicated that along with the seasonality effect of auto loan delinquency, the third quarter 60-day auto delinquency rate reflected the current lending environment.
Both the availability of funding (liquidity crisis) in the market for auto loans and tighter lending standards have contributed to significantly decrease the number of auto loans in the market, resulting in higher delinquency rates as a ratio for all auto loans, TransUnion.com reported.
In fact, 30 states experienced a lower year-over-year delinquency rate change compared to the 15.9-percent increase seen nationally overall.
Moreover, 11 states reflected a decrease in the 60-day auto delinquency year-over-year in the third quarter of 2008.
Looking ahead, Peter Turek, automotive vice president for TransUnion's financial services group, explained, "Our current forecasting models indicate that the national 60-day auto delinquency rate is expected to rise from a value of 0.80 percent in the third quarter of 2008 to 0.88 percent by the end of this year.
"The overall economy, weak labor market and lower disposable income levels continue to negatively impact the consumer," he added.
As for state projections, Mississippi (1.9 percent) is anticipated to experience the highest delinquency rate by fourth quarter 2009, while Wyoming (0.42 percent) should prove to have the lowest level of delinquency.
Offering a glimpse into overall credit statistics, TransUnion.com reported:
—Mortgage loan delinquency (ratio of borrowers 60 or more days past due) increased for the seventh straight quarter, hitting a national average high of 3.96 percent for the first nine months of 2008 and a staggering 54 percent higher than the same period last year.
—Mortgage borrower delinquency rates in the third quarter of 2008 were the highest in Florida (7.82 percent), followed closely by Nevada (7.71 percent). Meanwhile, the lowest mortgage delinquency rates were found in North Dakota (1.35 percent), South Dakota (1.6 percent) and Montana (1.71 percent).
—Average national mortgage debt per mortgage borrower rose slightly (0.2 percent) to $192,287 from the previous quarter's $191,681. Average national mortgage debt dropped 3.45 percent year over year, compared with $199,168 in the third quarter of 2007.
—Average bank card borrower debt increased to $5,710, a 1.57-percent upswing from the previous quarter's $5,621. The average remains 6 percent higher than the same period last year ($5,387).
—The steepest increases in average bank card debt over the previous quarter occurred in Wyoming (4.96 percent), Delaware (4.12 percent) and Arizona (3.12 percent). Maine experienced the largest drop in its average active bankcard balance (-1.4 percent), followed by North Dakota (-1.12 percent) and Alaska (-0.57 percent).
—Nationally, the ratio of credit card borrowers delinquent on one or more of their credit cards increased to 1.09 percent in the third quarter of 2008, up 4.8 percent over the previous quarter. On a year-over-year basis, the national delinquency incidence rate has risen 5.8 percent from 1.03 percent in the third quarter of 2007.