National Auto Loan Delinquency Rates Fall More Than 18 Percent in Q1

The national 60-day auto delinquency rate (the ratio of auto loan borrowers 60 or more days past due) fell 18.52 percent between the fourth quarter of 2009 and first quarter of 2010 to 0.66 percent, according to a TransUnion quarterly analysis of trends in the auto industry. The year-over-year delinquency rate at the national level fell by 20.48 percent in the first quarter.

The report is part of an ongoing series of quarterly consumer lending sector analyses focusing on credit card, auto loan and mortgage data available on TransUnion’s Web site. Information for this analysis is culled quarterly from approximately 27 million anonymous, randomly sampled, individual credit files, representing approximately 10 percent of credit-active U.S. consumers and providing a real-life perspective on how they are managing their credit health.

Quarterly Statistics

Auto loan delinquency was highest in Louisiana and Alabama at 1.20 percent and 1.13 percent, respectively. The lowest auto loan delinquency rates were found in Alaska (0.33 percent), North Dakota (0.33 percent) and Montana (0.37 percent). The largest improvements in delinquency from the previous quarter were found in the District of Columbia (42.3 percent decrease from 1.18 percent) and Utah (37.8 percent decrease from 0.61 percent). Auto loan delinquency rates rose for only four states since the fourth quarter of 2009 — Alaska (13.8 percent increase), South Dakota (9.8 percent increase), Vermont (9.4 percent increase), and North Dakota (3.12 percent increase).

Average auto debt nationally fell slightly quarter over quarter from $12,568 to $12,501. Year-over-year, auto debt fell by 0.75 percent in the first quarter. The District of Columbia held the largest average auto debt burden at $14,911, followed by Wyoming at $14,579. The lowest average auto debt was in Nebraska at $10,781. The regions with the steepest quarterly increases in average auto debt as a percentage were North Dakota (+2.37 percent), the District of Columbia (+2.10 percent) and Wyoming (+1.76 percent). Alaska experienced the sharpest drop in average auto debt (-3.90 percent), followed by Tennessee (-3.20 percent).

On a year-over-year basis, national bank auto originations increased by 5.4 percent, with North Dakota exhibiting the greatest rise with an increase of approximately 32 percent from first quarter 2009. On a regional basis, only eight states showed a drop in year-over-year originations.

Analysis

"The national trend we are now seeing points to a clear improvement in payment behavior," said Peter Turek, automotive vice president in TransUnion’s financial services group. "As we noted last quarter, part of the reason for the turnaround in delinquency rates is the influx of new, lower risk loans. Furthermore, this downward trend was energized by first quarter improvements in economic factors such as consumer confidence and savings rates, which demonstrated consumer willingness to focus on debt obligations. On a state-level basis, 46 states experienced a drop in their quarter-to-quarter delinquency rates, while only 3 states showed an increase on a year-over-year basis."

Forecast

"TransUnion expects next quarter’s national 60-day auto delinquency rate to continue to move downward due in part to seasonal factors, but also because of general improvement in certain aspects of the economy. Given a more positive outlook in per capita disposable income and projected new vehicle sales, our forecasting models point to a national 60-day auto delinquency rate in the range of 0.68 percent by year-end, factoring in the strong seasonal uptick in delinquency typical in the fourth quarter," said Turek.

Overview of U.S. Consumer Credit Status — 1st Quarter 2010

• TransUnion’s quarterly analysis of trends in the mortgage industry found that national mortgage loan delinquency rate (the ratio of borrowers 60 or more days past due) decreased in the first quarter of 2010 after steady increases for 12 consecutive quarters. The delinquency rate dropped to 6.77 percent — a level slightly lower than in the fourth quarter of last year. This statistic, which is traditionally seen as a precursor to foreclosure, reflects a decrease of 1.74 percent from the previous quarter’s 6.89 percent average. Year over year, mortgage borrower delinquency is still up approximately 30 percent (from 5.22 percent).

• The average national mortgage debt per borrower decreased (0.47 percent) to $192,774 from the previous quarter’s $193,690. On a year-over-year basis, the first quarter 2010 average represents a 1.39 percent decrease over the first quarter 2009 average mortgage debt per borrower level of $195,500.

• TransUnion’s quarterly analysis of trends in the credit card industry revealed that the national credit card delinquency rate (the ratio of bankcard borrowers 90 days or more delinquent on one or more of their credit cards) decreased to 1.11 percent in the first quarter of 2010, down 8.3 percent over the previous quarter. Year over year, credit card delinquencies fell by 15.91 percent.

• Average credit card borrower debt (defined as the aggregate balance on all bank-issued credit cards for an individual bankcard borrower) drifted downward for the fourth consecutive quarter nationally by 4.95 percent to $5,165 from the previous quarter’s $5,434, and down 10.57 percent compared to the first quarter of 2009 ($5,776).

TransUnion’s Trend Data database
The source of the underlying data used for this analysis is TransUnion’s Trend Data, a one-of-a-kind database consisting of 27 million anonymous consumer records randomly sampled every quarter from TransUnion’s national consumer credit database. Each record contains more than 200 credit variables that illustrate consumer credit usage and performance. Since 1992, TransUnion has been aggregating this information at the county, Metropolitan Statistical Area (MSA), state and national levels.

About TransUnion
As a global leader in credit and information management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering comprehensive data and advanced analytics and decisioning. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Founded in 1968 and headquartered in Chicago, TransUnion employs associates in more than 25 countries on five continents. www.transunion.com/business