Red flags remain furled, but auto-loan delinquencies have bumped up, according to credit tracker Experian Automotive.
“The rosy glow of perfect payment performance in the automotive space is beginning to tarnish,” says Melinda Zabritski, the firm’s senior director-automotive finance. “We’re starting to see a slight uptick in the number of consumers struggling to make their automotive payments on time.”
Still, delinquency rates remain low. They’re something to keep an eye on, she says.
More significant delays in loan paybacks could affect future credit availability, but for now auto lenders vie for business in a highly competitive market.
Sixty-day loan delinquencies increased 0.62% in the second quarter from 0.58% the previous year. Thirty-day delinquencies went from 2.38% to 2.39%.
The total balance of loans that are 60 days delinquent has increased $859 million since last year’s second quarter. The balance of 30-day delinquent loans has increased $2.8 billion from a year ago.
Auto-loan outstanding balances reached an all-time high in the second quarter, hitting $839.1 billion. That’s up 11.7% from the previous year, according to Experian’s latest State of the Automotive Finance Market report.
Other findings include:
- Repossession rates in the second quarter jumped more than 70% to 0.62% from a year ago. Finance companies were the only lenders seeing a year-over-year repo increase.
- All lender types experienced growth in year-over-year quarterly loan volume, with banks up $31 billion, credit unions up $25 billion, finance companies up $24 billion and captive finance companies up $9 billion.
- The average charge-off in the second quarter was $8,149, up $932 from the previous year.