Auto loan delinquencies reached the lowest point in two years for the second quarter, at only 0.95% of outstanding loans for accounts that were 60 days or more overdue, down slightly from 0.98% a year ago, according to credit reporting bureau TransUnion.
Lower delinquencies reflect the continuing strong economy, said Jason Laky, senior vice president and automotive business leader for TransUnion. At the same time, the average auto loan debt increased almost $3,000 – to $17,696 in the second quarter, from $14,778 a year ago, TransUnion said.
“The unemployment rate is either steady or declining; in any case employment numbers continue to grow,” Laky told Auto Finance News in a phone interview on Wednesday.
“The core strength of the economy means consumers are still employed, they’re still getting cars, economic conditions continue to favor them making their payments,” he said.
The 60-day delinquency rate also declined for borrowers with subprime credit, TransUnion said. TransUnion defines subprime as VantageScore credit scores below 601. That rate was 4.98% for the second quarter, down from 5.09% a year ago, TransUnion said.
