Auto Loans 60 Days Past Due Rise by 21.2 Percent

More than $25.5 billion in loans at risk, according to Experian Automotive

Schaumburg, Ill., Sept. 9, 2009 — Automotive loans that are 60 days past due rose by 21.2 percent from the second quarter of 2008 to the second quarter of 2009, 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 in the first half of 2009 compared with the first half of 2008. In the second quarter of 2009, 0.80 percent of all automotive loans were 60 days past due, compared with 0.66 percent for the same time period in 2008. Thirty-day delinquencies also rose by 14.6 percent in the second quarter to 3.06 percent, up from 2.67 percent the year before. Combined, 30- and 60-day delinquencies accounted for $25.5 billion in at-risk loans.

“Challenging economic times continue to take a toll on the automotive finance world,” said Scott Waldron, president of Experian Automotive. “As the recession continued to drag on during the second quarter, the rate of delinquency rose much faster from the first to second quarter than it did the previous year. This caused lenders to tighten criteria and push some consumers out of the new vehicle market.”

Experian Automotive’s analysis showed that market conditions were pushing a higher percentage of vehicle shoppers into used vehicle financing. Used vehicle financing rose by 5 percent from the first half of 2008 (62.73 percent) to the first half of 2009 (66.06 percent). This shift in used market share did bring increased market share to independent used vehicle retailers, who saw their financing share rise by more than 7 percent year over year (30.88 percent in the first half of 2008 to 33.11 percent in the first half of 2009).

There were other positive signs in the market based on loan attributes. The average length of newly originated loans for new vehicles dropped from 63 months in the first half of 2008 to 62 months in the first half of 2009. In addition, the average loan amount rose by $105 to $24,265 in the first half of 2009, up from $24,160 in the first half of 2008. Despite the rise in total loan amounts, average monthly payments on new car loans dropped from $458 in the first half of 2008 to $453 in the first half of 2009.

“Consumers were financing larger amounts for new vehicles in the first half of 2009 compared with the first half of 2008, which could be a sign that overall consumer confidence is starting to rebound,” said Melinda Zabritski, director of Automotive Credit for Experian Automotive. “If new vehicle loan amounts continue to see increases into the third quarter, it will be a very positive sign for the auto industry.”

Other findings:

  • Top 20 lenders overall represented 42 percent of all loans originating in the first half of 2009. This was a 5.38 percent decrease from the same time the prior year.
  • Three states had a reduction in 30-day delinquencies: Alaska (15 percent), Nebraska (3 percent) and Michigan (2 percent).
  • The states with the largest percentage increase in 30-day delinquencies were Idaho (61 percent), Montana (38 percent), Hawaii (32 percent), Washington (28 percent) and Utah (27 percent).

An insight snapshot with additional details on Experian Automotive’s findings can be downloaded at http://www.experian.com/forms/auto-credit-trend-analysis.html.

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.    

About Experian
Experian is the leading global information services company, providing data and analytical tools to clients in more than 65 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to manage their credit relationships and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2009, was $3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and São Paulo, Brazil.

For more information, visit http://www.experianplc.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
DeVilling Group for Experian Automotive
1 248 875 4207 Telephone
mjdevilling@yahoo.com Email

# # #

 

Top