Auto loan defaults were down from a year ago in August, and only a few basis points higher than a record low in July, according to the latest S&P/Experian Consumer Credit Default Indices.
“The ongoing improvement in the consumer economy is reflected in consumer credit default rates,” said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. “Two economic areas showing strength are auto sales and housing,” he said today in a written statement.
The default rate for auto loans for August was 0.9% of the amount outstanding, up from a record low of 0.86% in July, but below the year-ago rate at 1% for August 2014.
Blitzer said besides low consumer credit default rates, positive economic indicators include job growth, increases in consumer spending, and a rise in consumer credit outstanding. He noted that defaults are at low levels despite continued weak wage growth and an increase in approvals for customers with subprime credit.
Besides auto loans, the S&P/Experian Consumer Credit Default Indices also track default rates for credit cards, and for first and second mortgages. The default rate was down from a year ago for all those segments except for second mortgages, which were at 0.57%, up from 0.51% a year ago. A composite rate for all those segments combined was 0.96% for August, down from 1.03% in August 2014.
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