TransUnion

Auto Delinquency Rate to Rise, Auto Loan Debt to Soar in 2014 - Seite 2

"We expect the number of leases to continue to rise as a percentage of all auto loans in 2014," said Turek. "This will likely help keep auto loan delinquencies low, as leases are generally issued to consumers with a higher VantageScore® credit score. Overall, the increased demand in both new and used vehicles has allowed dealers and lenders to match consumers with the right vehicles and loan terms."

Another contributing factor to lower delinquency levels is the fact that non-prime borrowers make up a smaller portion of all auto loans. Non-prime borrowers are identified as those with a VantageScore® credit score lower than 700 on a scale of 501-990. Even though the percentage of newly originated non-prime auto loans (33.18% in Q2 2013) has increased, the impact on the overall delinquency is minor.

In Q3 2013 (latest data available), non-prime borrowers made up 29.8% of all auto loans. This is significantly down from the Q3 high observed in 2008, when 34.6% of non-prime borrowers comprised all auto loans. In Q3 2013 there were more than 3 million fewer auto loans (down nearly 15%) in the non-prime borrower segment than there were in Q3 2008. As a comparison, the total auto loan population has only dropped about 1% in that same timeframe, or around 550,000 fewer auto loans.

Total Auto Loan Account Volume -- Percentage of Non-Prime Borrowers

Q3 2007		Q3 2008		Q3 2009		Q3 2010		Q3 2011		Q3 2012		Q3 2013
33.2%		34.6%		34.1%		32.2%		30.2%		30.0%		29.8%

"The data highlight the significance non-prime borrowers play in the overall delinquency rate," said Turek. "We have been tracking this segment of the population closely for some time, because once they take a bigger part of the overall auto loan pie, we expect upward pressure on delinquencies."