The 60-day auto delinquency rate continued to climb through the third quarter of 2017. Driven primarily by “relaxed” underwriting standards from years past and increasing subprime originations, TransUnion’s senior vice president and automotive business head, Brian Landau, said two-month payment lapses rose 7 basis points to 1.4 percent.
At the same time, the average balance of outstanding auto loans increased by around 5.9 percent, resulting in the lowest year-over-year growth rate since the third quarter of 2012. The group’s Industry Insights Report cited this quarter’s serious auto loan delinquency rate as the highest observed since Q3 2009 — you know, when nobody had any money to pay their bills.
New business was also down. Subprime, near-prime and prime loan originations were down almost 6 percent for the third quarter. However, TransUnion explained to Automotive News that the blow was offset slightly by a 3.2 percent increase in prime-plus and super-prime originations.
“Despite fewer originations, there is evidence that more people will be opening auto loans in the near term,” Landau said. “In September, U.S. light-vehicle sales increased for the first time this year on an annual basis. Also, there will likely be several thousand new vehicles purchased as a result of the hurricanes in Florida and Texas.”
Be that as it may, it doesn’t account for the growing number of subprime loans or how many of those are now categorized as “deep subprime.” It also doesn’t solve the problem of people defaulting on car payments. Increased sales is great for the industry, but doesn’t guarantee individuals will be able to afford those purchases down the line.
A version of this article first appeared on thetruthaboutcars.com
The post Auto Loan Delinquencies Continued to Climb in the Last Quarter appeared first on VWVortex.
from VWVortex http://ift.tt/2A8v2NU
via IFTTT
Comments
Post a Comment