Auto Delinquencies Still Pointed North

Amid all the worst-is-behind-us sentiments being tossed about these days, auto loan delinquencies are still on the rise, TransUnion says.

In data released yesterday, TransUnion indicated that the year-over-year national 60-day auto delinquency rate increased 27.69% in the first quarter of 2009 to 0.83%. While that is not a terribly high number, TransUnion expects the 60-day delinquency to continue its march higher:

TransUnion's national 60-day auto delinquency rate forecast for the first quarter of 2009 was short by about 2%, as a slightly more favorable vision of the economic environment prompted some downward revisions to our forecast through the end of the year. Our current forecasting models indicate that the national 60-day auto delinquency rate will rise to about 1% by year-end, about the same level as that experienced at the end of our last recession. However, the overall economy, weak labor market and lower disposable income levels will continue to negatively impact the consumer well into 2010.

That is no small increase. The 17 basis points of additional delinquencies means an increase in the past-due rate of nearly 21% by yearend. And I was just starting to feel good about the economy.

Tags: credit-performance, delinquency, loans, transunion

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Comment by Frank Rauscher on June 22, 2009 at 11:20am: Those numbers are too general to understand what is really happening and to whom.
There is a big difference bewtween indirect lending and direct lending, sub-prime,
re-aging policies, subvention, etc. and eventual losses. Not too worry - with our finally formalized 'TOO BIG TOO FAIL" policy, the Wall Street crowd will keep the lending avenues open in some way or fashion. All the key Washington decision makers are from Wall Street and we know how that club works.

It will be tougher for the legitmate community bankers that do good underwriting to source good credits in an economical process unless they are heavy into relationship banking or really understand that "marketing" is not just "advertising". I wish those good bankers only the best.