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Auto loan delinquency rates at historic lows

August 31, 2012
One indicator of the status of our economy is the rate at which car owners are able to make payments or, rather, aren’t. The delinquency rate — the rate at which owners can’t get the check in the mail for their new car — has fallen to an all-time low, according to a Los Angeles Times report.
 
Credit report entity TransUnion began tracking this data in 1999, which it calculates as the percentage of borrowers 60 or more days past due. That rate for the second quarter of 2012 was recorded at 0.33 percent — down from 0.36 percent in the first quarter and a full 25 percent lower than last year.
  
Auto sales in the U.S. have risen 14 percent in the first seven months of 2012, to 8.4 million vehicles. Experts suggest it is a result of more relaxed credit conditions that allow buyers with poorer credit to purchase a new car. This trend eventually could result in the delinquency rate climbing back up.
  
“We are at such a low delinquency level” said Peter Tureck, automotive vice president for TransUnion’s financial services business wing, “that a slight rise through the end of the year should be expected, though the overall rate will remain relatively low.”
  
Which states have the highest delinquency rates in the country right now? That would be Louisiana, Mississippi, and Oklahoma, all of which are within the 0.55-0.60 percent range.
 
 

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