Auto loan delinquencies rose almost 13% in the last year to close the third quarter at 1.16%. At the same time, average auto loan debt increased for the fourteenth straight quarter to $17,352.
This comes from the latest TransUnion Industry Insights Report, a quarterly compilation of consumer credit data.
“The auto loan delinquency rate is rising, but it remains well below levels observed just a few years ago,” said Peter Turek, automotive vice-president for the credit reporting company. “With nearly five million more auto loan accounts reported in the last year and with continued sales strength in this sector, it’s not unusual to see an increase in the delinquency rate.”
Turek suggested that so long as delinquencies stay around 1%, auto lenders won’t make any major change in credit strategy. TransUnion defines delinquent as 60 days or more overdue, for auto loans.
Subprime borrowing continues to rise. Turek noted that this increase has not significantly affected delinquency rates, though delinquencies rose in the quarter among both subprime and nonprime borrowers.
Actually, Turek said, “the uptick in delinquency reflects a healthy and thriving auto finance industry where credit is more broadly available to all consumers.”