More consumers were late making their auto loan payments in the second quarter ended June 30, as the struggle amid a sluggish economy and rising job losses continues, reports TransUnion.
The rate of auto loans 60 days past due for the quarter rose to 0.73% from 0.68% at the same time a year ago. Auto loan delinquencies, however, actually improved in the second quarter compared with the first quarter’s rate of 0.83%.
The trend mirrored delinquency rates for credit cards and mortgages that TransUnion released earlier this month and reported in CCR Newsline. Both of those types of credit showed marked jumps from last year, but improved compared with the first quarter.
Yet for auto loans, the improvement may just be seasonal, says Peter Turek, automotive vice president in TransUnion's financial services group. It is too early to tell if the second-quarter delinquency rates overall indicate a stronger economy, he says.
Consumers often catch up on past-due bills between April and June as tax returns arrive and pressures from holiday spending ease. TransUnion expects the rate to reach 0.90% by the end of the year, partly because of the weak labor market.
Average auto debt nationally decreased slightly to $12,560 in the second quarter, from $12,869 a year ago. That decline represents in part a tightening of credit, along with a reluctance among consumers to take on new debt amid the recession, Turek added.
TransUnion's report is based on data from approximately 27 million anonymous, randomly sampled, individual credit files, representing approximately 10% of U.S. consumers with credit accounts.