Experian Automotive: 30-day auto loan delinquencies drop 3.5 percent, while 60-day delinquencies remain flat
SCHAUMBURG, IL--Feb. 19, 2014: Experian Automotive today announced that consumers continued to make their loan payments on time in Q4 2013. According to its latest State of the Automotive Finance Market report, 30-day automotive loan delinquencies were down 3.5 percent (going from 2.72 percent in Q4 2012 to 2.63 percent in Q4 2013), and 60-delinquencies remained flat at 0.74 percent.
Additional findings from the report show outstanding automotive loan balances increased 11 percent from Q4 2012, reaching $798.5 billion in Q4 2013 (the highest level since Experian Automotive starting publically reporting the data in 2007). The increase in open loans spanned across all lending types with finance companies showing the greatest increase of 21.2 percent, followed by credit unions with 13.2 percent, then banks with 10.5 percent and captives by 5.3 percent.
"The automotive finance market continues to move along at a very healthy pace, and we are pleasantly surprised by the continued drop in delinquencies," said Melinda Zabritski, Experian Automotive's senior director of automotive finance. "The record level of open loan balances combined with the reduction in late payments shows that consumers who have purchased a vehicle are not only reliant on financing, but also firmly committed to making their payments on time."
The report also showed that repossessions were up 42.8 percent in Q4 2013, going from 0.46 percent in Q4 2012 to 0.65 percent in Q4 2013. However, the increase was driven entirely by finance companies that provide a significant majority of their loans to credit challenged customers. In Q4 2013, finance companies nearly doubled their repossession rate, jumping to 2.84 percent from 1.61 percent in Q4 2012.
Other lender types saw their repossession rates fall slightly:
Banks went from 0.24 percent in Q4 2012 to 0.23 percent in Q4 2013 Captives went from 0.36 percent in Q4 2012 to 0.34 percent in Q4 2013 Credit unions went from 0.16 percent in Q4 2012 to 0.15 percent in Q4 2013
"The increase in repossessions by finance companies could simply be attributed to a tightening of repo standards," Zabritski continued. "Aside from this increase, we are seeing the rest of the automotive finance industry trend positively, creating optimism for a strong 2014."
In other findings:
Open loans in the nonprime, subprime and deep subprime segments were up to 36.2 percent market share in Q4 2013 from 35.7 percent in Q4 2012 The percentage of loan dollars that are 30 days delinquent rose just slightly, from 2.22 percent in Q4 2012 to 2.26 percent in Q4 2013 The percentage of loan dollars that are 60 days delinquent rose slightly from 0.55 percent in Q4 2012 to 0.58 percent in Q4 2013 The average charge-off amount for loans gone bad jumped from $7,277 in Q4 2012 to $8,520 in Q4 2013