Things are beginning to pick up for the auto industry, reports the Wall Street Journal. The number of consumers who were late by 60 days or more on their auto loan repayment fell drastically in 2010’s second quarter. Along with TransUnion’s recent announcement regarding reduced rates of credit card delinquency, this is the good news for which a recession-choked nation thirsts.
Rainy day saving makes restoration slow
Through the present recession, it has been difficult for consumers to return to the kind of big-ticket buying the automotive industry depends upon for business. Yet it has been a optimistic for car loan repayment habits, says Peter Turek of TransUnion.
“Although part of the reason for the turnaround in delinquency rates is the influence of new, lower risk loans, consumers don’t see a quick fix to the short-term economic and employment situation,” he said.
2nd quarter figures were 20% better than the last
Consumers 60 days late or more on their auto loans fell by .53. As outlined by the Journal, this was a 20 percent over Quarter 1 late payment rates. That’s the largest decrease 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, while Vermont was the biggest loser. Vermont’s missed payments went down nearly 50 percent, from 1 percent to .58 percent. On a parallel note, Hawaii’s rate of loan origination was lowest within the study. The reason could be the overall expense of living in Hawaii. It makes holding onto old cars an attractive proposition.
But the news is not all good. TransUnion sees a .6 percent increase in car loan late payment percentage by year’s end. The probable cause would be the predicted weight of holiday spending.
Additional reading
Wall Street Journal
online.wsj.com/article/BT-CO-20100830-703526.html
