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Auto loan delinquencies repos down
SCHAUMBURG, Ill. (12/13/10)--Consumers did a better job repaying their auto loans during third quarter than they did during third quarter 2009. Both delinquencies and repossessions dropped, and lenders loosened loan criteria, according to Experian Automotive's quarterly analysis of the automotive credit industry. The findings have implications for credit unions, whose bread-and-butter has traditionally been auto loans. New-auto loans accounted for 11.4% of credit unions' loans in October, down slightly from a year earlier, while used-auto loans were 17.9% of loans, a slight increase over October 2009, according to the Credit Union National Association's Monthly Credit Union Estimates. Both 30-day and 60-day auto-loan delinquencies dropped for all lenders studied by Experian during third quarter from third quarter 2009. Experian said 30-day delinquency fell 8.43%--to 2.99% from 3.27%--while the 60-day delinquency rate plunged 17.39%--to 0.77% from 0.93%. Total dollar volume of loans at risk of default dropped by $6.4 billion. "Overall, our Q3 analysis shows that there are very positive signs for the automotive lending industry," said Melinda Zabritski, director of automotive credit for Experian. "With delinquencies down and less money in their portfolios at risk, lenders can be a little less conservative in their lending strategies. "Consumers still have the impression that lending is extremely tight, so it will be important for lenders and automotive retailers to educate car shoppers that there are more loans available to a wider group of consumers," Zabritski added. Shares of new loans to nonprime consumers with credit scores of 620 to 679 rose to 10.86% from 9.709% in the same period for 2009. Subprime consumers, with credit scores from 550 to 619, comprised 6.61% of loans, while deep-subprime consumers, with credit scores below 550, rose to 1.59% from 1.46%, the study found. Other findings for third quarter:
* New-vehicles: The average credit score for a new-vehicle customer fell six points--to 769 in third quarter 2010 from 775 in third quarter 2009, and the average loan amount rose to $25,273 from $22,743. * Used-vehicles: The average credit score for used-vehicle customers was 683--down one point from the year before--and the average loan was $16,706, up from $15,729 a year earlier.


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