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Report: Auto-Loan Late Payments Down in 2013

The rate of late payments in auto loans stayed low in the last quarter of 2013, data from American Bankers Association show.

The auto-loan delinquency rate in direct auto loans went down to 0.79 percent from 0.88 percent in the same period in 2012. Direct auto loans are originated by banks and credit unions and given directly to consumers.

Meanwhile, the indirect auto-loan delinquency rate, or the late-payment rate in auto loans arranged by dealerships, fell to 1.62 percent in 2013 from 1.64 percent last year.

The ABA defines delinquencies as late payments of at least 30 days.

With low delinquency rates, lenders are more confident to loosen their credit standards, making credit more available to consumers.

But it is not just auto-loan delinquencies that declined. The ABA report also shows that consumers are becoming more responsible payers as the late-payment rates in other loans also dropped.

Home equity loan delinquencies, for example, fell from 1.25 percent to 1.07 percent in 2013. Delinquencies in home equity lines of credit also decreased to 3.48 percent from 3.58 percent.

ABA chief economist James Chessen said in a statement that people are more able to meet their financial obligations now as their finances improve and as they become more conscious about their debts.

Photo credit: Merlin2525 / Open Clip Art




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