Based on data released by credit-reporting agency TransUnion, the rate of auto loan payments late by 60 days rose to 1.14 percent in the final quarter of 2013. It was more than 1.04 percent in the previous quarter and 1.09 percent in the last quarter of 2012. However, it is below the 1.3 percent average late-payment rate for October-December quarter since 2007.
Most consumers put off timely payments on credit cards, auto loans and mortgages in favor of the holiday shopping sprees that usually bust their budgets.
Late payments also increased among subprime borrowers from 5.7 percent in the fourth quarter of 2012 to 6.1 percent in 2013.
TransUnion predicts that the auto loan delinquency rate will fall to 1.02 percent in the first quarter of 2014 because consumers usually keep up with the payments in January-March quarter or in the first three months after the holidays.
The findings suggest that consumers are able to make timely payments even if they take on bigger auto loans.
The auto loan debt per borrower rose to $16,769 in the fourth quarter of 2013, up by more than 4 percent from 2012. It has been growing steadily for 11 consecutive quarters now since the first quarter of 2011.
Pete Turek, TransUnion’s vice president of automotive, said, “Consumers are willing to take on more auto debt.”
For the latest report, the agency tracked 60.5 million auto loan accounts, up from 57 million last year.
Lenders have responded to the growing number of car shoppers by making loans more affordable and credit easier, even to those with nonprime credit.
The number of new auto loans increased by 11 percent to over 6 million in the third quarter of 2013, and more than 32 percent of new auto loans were made to subprime borrowers. That is below the pre-recession rate of almost 37 percent in the third quarter of 2007, but more than the 25 percent low in 2009.