CHICAGO (12/17/14)--Auto loan debt per borrower will continue on an upward trend, rising to $18,244 at the end of 2015, according to TransUnion.
That would make 19 consecutive quarters of increases since the first quarter of 2011, when auto loan debt per borrower stood at $14,954.
The TransUnion forecast calls for the national auto loan delinquency rate (the ratio of borrowers 60 or more days past due) to end 2014 at 1%, and increase slightly to 1.27% at the end of 2015.
"We expect the auto loan market to continue to perform exceptionally well in 2015, with more sales leading to continued increases in auto loan debt per borrower as the national portfolio gets younger on average," said Peter Turek, automotive vice president in TransUnion's financial services business unit.
TransUnion anticipates the economy will continue to improve in 2015, with a better employment picture boosting the auto industry. "While the auto loan delinquency rate has slowly risen to a point where it will be above 2010 levels, we are still far off the peaks observed in 2008 and 2009 when delinquencies were more than 30 basis points higher," Turek said.
Since 2007, the auto loan delinquency rate has been as low as 0.86% (in the second quarter of 2012) and as high as 1.59% (in fourth quarter of 2008). On average, the delinquency rate during the fourth quarter between 2007 and 2013 was 1.29%.
While delinquency levels for subprime borrowers have grown to 5.3% in 3Q 2014 from 4.5% in 3Q 2013 and 4.2% in 3Q 2012, the contribution of this segment to the overall delinquency rate has been muted because its share has remained between 14% and 15% during this timeframe. Subprime share of balances had peaked in 2009 at just more than 22%.