3Q auto-loan delinquencies surge 13% annually

November 24, 2014

CHICAGO (11/25/14)--Auto-loan delinquencies climbed 13% annually in the third quarter, according to a report by TransUnion.

The quarter closed with a 1.16% delinquency rate, which tracks the ratio of borrowers who are 60 days or more delinquent on their auto-loan payments, up from 1.02% the prior quarter.

"The auto-loan delinquency rate is rising, but it remains well below levels observed just a few years ago," said Peter Turek, TransUnion automotive vice president. "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."

Delinquency rates rose the most for the youngest demographic, with those under the age of 30 seeing an 18% annual increase.

Hawaii and Oklahoma were the only two states to experience declining rates of delinquencies. Nebraska, South Carolina and New Mexico witnessed the largest increases. 

Auto-loan debt also climbed for the 14th consecutive quarter to an average of $17,352, TransUnion reported.

Per borrower, auto-loan debt climbed 3.9% in the third quarter year-over-year, and 1.4% on a quarterly basis.

The number of auto-loan accounts rose to 64.2 million from 59.4 million in the third quarter annually as well.

Further, the subprime delinquency rate climbed to 5.31% from 4.5% annually in Q3.

"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."