TransUnion: Late auto-loan payments fall in 2Q
Source: AP-Excite
By ALEX VEIGA
LOS ANGELES (AP) - More Americans are making their car payments on time, a trend that has sent the rate of overdue auto loans to the lowest level on records dating back more than a decade.
The rate of U.S. auto loan payments at least 60 days overdue fell in the second quarter to 0.33 percent. That's down about 25 percent from the same period last year and 8 percent from the first three months of this year, credit reporting agency TransUnion said Tuesday.
The latest rate marks the lowest level since TransUnion began tracking auto loan data in 1999. The highest rate recorded by the company was 2.39 percent in the first quarter of 2000.
All told, the auto loan delinquency rate has fallen on an annual basis for 11 consecutive quarters. Among the factors contributing to the decline: lower interest rates that help more car buyers qualify for financing, and a strong market for used cars, which has provided more of an incentive for borrowers to avoid falling behind on payments by increasing the market value of their investment.
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dipsydoodle
(42,239 posts)for less loans being taken out even though it is a percentage. May also reflect higher underwriting criteria for the loans.
Perverse as it might sound lowering the underwriting criteria also has the same effect : increased sales lower delinquent debt as a percentage.
fasttense
(17,301 posts)If a corporation repossess a vehicle after only 1 missed payment it reduces the number of people who are struggling to make their payments to the corporation. With strict repossession tactics, only the more wealthy and good payers remain as customers.
If a corporation reposes after 3 or 4 missed payments, they tend to have more late paying customers because they are carrying those who have missed 1, 2, or 3 late payers. Repossession is a win-win for a corporation. They get the payments before the late payments and they get the car to resell.
This is not necessarily due to people having more money to make their payments on time.