The Wall Street Journal reports that after many long months of bad news for the recession-laden vehicle industry, it’s time for some good news. That’s because a TransUnion study has indicated that delinquency rates for consumer auto loans that are at least 60 days past due decreased substantially within the second quarter of 2010. This welcome sign of recovery was a nice addition to TransUnion’s previous finding the number of charge card delinquencies had also waned.
Rainy day saving keeps restoration coasting in neutral
Fewer consumers have been willing to plunk down their incredible shrinking dollars on large ticket purchases like automobiles, which has been less than stimulating for prospects of an economic turnaround. Yet it has been a good for auto loan repayment habits, says Peter Turek of TransUnion.
”Although part of the reason for the turnaround in delinquency percentage is the influence of new, lower risk loans, consumers do not see a quick fix to the short-term economic and employment situation,” said Turek.
A 20% improvement compared to the first quarter of 2010
Auto loan delinquency rates for consumers later than 60 days on their payment was down by .53 percent as outlined by the Journal. This can be a 20 percent improvement over the previous quarter’s performance. That’s the largest decline since summer 2001, writes the Wall Street Journal. Rhode Island, Montana and Utah were the only states to show an increase in the 60-day delinquency rate, when Vermont was the biggest loser. Vermont’s missed payments went down nearly 50 percent, from 1 percent to .58 percent. In related news, Hawaii experienced the greatest drop in car loan origination. Milking old vehicles for anything they’re worth is probably less costly than getting a gallon of milk in Hawaii, anyway.
In spite of the good news, TransUnion’s experts predict a .6 percent increase in delinquency by the fourth quarter. Blame it on the holidays, why do not you.
Wall Street Journal
online.wsj.com/article/BT-CO-20100830-703526.html
