Auto Loans 60 Days Past Due Rise by 17 Percent

Nearly $29 Billion in Loans at Risk, According to Experian Automotive

Schaumburg, Ill., March 18, 2009 — Automotive loans that are 60 days past due rose by nearly 17 percent from the fourth quarter of 2007 to the fourth quarter of 2008, according to figures released today by Experian Automotive.

During its quarterly State of the Auto Finance Market Webinar, Experian Automotive presented its latest analysis of automotive lending trends, providing a comprehensive view of the market from fourth quarter 2007 through fourth quarter 2008. Currently, 1.04 percent of all automotive loans are 60 days past due, compared with 0.89 percent in the fourth quarter of 2007. Thirty-day delinquencies rose 9.87 percent over the same period, to 3.06 percent in fourth quarter 2008 from 2.78 percent in fourth quarter 2007. Combined, 30- and 60-day delinquencies accounted for nearly $29 billion in at-risk loans.

“There continues to be a steep climb in the number of people past due on their auto loans, which causes a negative ripple through the industry,” said Scott Waldron, president of Experian Automotive. “As more loans become delinquent, lenders begin to tighten their criteria for automotive lending. Ultimately, this makes it more challenging for consumers to find funding when they want to buy a car or truck and more difficult for dealers to help consumers secure financing.” 

According to Experian’s Scorex PLUSSM, the average loan score for a new vehicle loan was 765 in the fourth quarter of 2008, 12 points higher than the average credit score for a new vehicle loan in the fourth quarter of 2007. Although the average loan score for new loan originations rose — largely due to more stringent loan criteria from lenders — overall consumer credit worsened. The percentage of all outstanding loans to prime customers (680 credit score and above) fell by nearly 1.5 percentage points, from 57.97 percent in the fourth quarter of 2007 to 56.5 percent in the fourth quarter of 2008.

“The overall drop in consumer credit, combined with lenders’ tightening of loan criteria, is making it more difficult for auto retailers to find financing for their potential customers,” said Melinda Zabritski, director of automotive credit for Experian Automotive. “However, there are still financing sources out there if retailers know where to look. They need to develop a better understanding of lenders in their market and find out who has programs for various credit levels.”

Other findings:

  • Delinquencies are highest in the Southeast, as Mississippi, Alabama, Georgia and South Carolina have four of the five highest 30-day delinquency rates. The District of Columbia is second.
  • The states with the lowest 30-day delinquency rates are North Dakota, Arkansas, South Dakota, Montana and Wyoming.
  • The average loan for a new vehicle was $24,444 in the fourth quarter of 2008, down $338 from the first quarter of 2008 ($24,782).
  • The average loan for a used vehicle was $15,904 in the fourth quarter of 2008, down $678 from the first quarter of 2008 ($16,582).
  • From the first quarter to the fourth quarter of 2008, small economy cars and entry-level SUVs saw significant increases in prime loan market share, up 29.4 percent and 24.2 percent, respectively. For the same time period, prime loans for full-sized pickup trucks and large SUVs saw decreases of 17.31 percent and 13.01 percent, respectively.

About Experian Automotive
Experian Automotive, a part of Experian, delivers information services to manufacturers, dealers, finance and insurance companies, and consumers. Experian® helps automotive clients increase customer loyalty, target and win new business, and make better lending and vehicle purchase decisions. Its National Vehicle Database, housing more than 500 million vehicles, along with Experian’s credit, consumer and business information assets, meets the industry’s growing demand for an integrated information source. Experian’s advanced decision support services help clients turn this information into improved business results. Experian technology supports several top automotive Web sites, including eBay Motors, CarsDirect.com, CarMax.com and NADAguides.com. For more information on Experian Automotive and its suite of services, visit our Web site at http://www.experianautomotive.com.

Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc.

Other product and company names mentioned herein may be the trademarks of their respective owners.  

Contact:
Mike DeVilling
The DeVilling Group for Experian Automotive
1 248 875 4207 Telephone
mjdevilling@yahoo.com Email

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