Repo man’s delight: Mississippi tops in tardy car payments

May 23, 2012

Banking & Finance

Here’s a dubious list that Mississippi leads: Late car payments.

The list by credit reporting agency TransUnion is sure to bring anguish to lenders and joy to repo men.

TransUnion says an analysis found that Mississippi had the highest auto loan delinquency rate nationwide, with 0.77 percent at the end of the first quarter. This is well above the national delinquency rate, which was 0.36 last quarter – the lowest level since TransUnion began tracking the data in 1999.

TransUnion anticipates auto loan delinquency rates to remain relatively low for the remainder of the year, rising and falling with traditional seasonal patterns.

The national auto loan delinquency rate (the rate of borrowers 60 or more days past due) reached its lowest level since TransUnion began tracking the data in 1999.

The first quarter auto loan delinquency rate of 0.36 percent represented a nealry 27 decline from Q1 last year.

On a quarterly basis, auto loan delinquencies declined almost 22 percent from 0.46 percent in Q4 2011.

Peter Turek, automotive VP in TransUnion’s financial services business unit, said fewer delinquencies can be attributed primarily to growing demand for both new and used vehicles and higher used vehicle values, “which equates to an increase in equity for consumers.”

He said TransUnion is seeing increases in both lending and leasing across the board, along with a higher number of loans originated in the non-prime risk segments

Between Q4 2011 and the first quarter of this year, 43 states experienced declines in their auto delinquency rates. On a more granular level, only 34 percent of metropolitan areas saw increases in their auto delinquency rates in Q1.

“We anticipate national auto loan delinquency rates to remain relatively low for the remainder of the year, rising and decreasing with traditional seasonal patterns,” added Turek. “However, a slight increase from this record-low level would not be surprising and should not be construed as a negative event, as lenders continue to originate more loans to consumers across all credit risk levels.”

TransUnion’s forecast is based on various economic assumptions, such as unemployment rates, consumer sentiment, disposable income, and interest rates. The forecast changes as the economy deviates from a conservative economic forecast or if there are unanticipated shocks to the economy affecting recovery.

 

 

 

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