Some much-needed good news has come down the auto industry news expressway, reports the Wall Street Journal. That’s because a TransUnion study has indicated that delinquency rates for consumer auto loans that are at least 60 days past due decreased significantly in the second quarter of 2010. News like this and the reduction of credit card payment delinquencies is the kind of good news TransUnion should be happy to proliferate.
Buyers who become savers slow the turnaround
Fewer consumers have been willing to plunk down their incredible shrinking dollars on big ticket purchases like automobiles, which has been less than stimulating for prospects of an economic turnaround. Peter Turek of TransUnion sees a silver lining to the economic dark cloud when it comes to the diminished delinquency rate.
“Although part of the reason for the turnaround in delinquency rates is the influence of new, lower risk loans, consumers do not see a quick fix to the short-term economic and employment situation,” he said.
Q2 results were 20 percent better than Q1
The auto loan delinquency rate for delinquencies of 60 days or more fell to 0.53 percent, which constitutes a 20 percent decrease from 2010′s first quarter. Moreover, the decrease is the most significant to occur since the summer of 2001. Vermont came out on top when it comes to most improved payees, while Rhode Island, Utah and Montana came out on the bottom. The Maple Syrup state experienced nearly a 50 percent drop in delinquency, from 1 percent to 0.58 percent. In related news, Hawaii experienced the greatest drop in auto loan origination. This could be because prices in the island paradise are high all around, so old cars are being driven into the ground.
By the fourth quarter of 2010, however, TransUnion is predicting a 0.6 percent increase in delinquency.The probable cause is the anticipated weight of holiday spending. Thus, enjoy the good news while you can.
Wall Street Journal: http://online.wsj.com/article/BT-CO-20100830-703526.html
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