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There's more to the story on delinquency drop

The auto loan delinquency rate dropped in the fourth quarter, but that doesn't necessarily mean more borrowers are making their payments on time. There's more to the story.

The 30-day delinquency rate in the fourth quarter was 2.36 percent, down from 2.44 percent a year earlier, according to Experian. The improvement, however, was driven solely by drastic delinquency rate improvements in Florida, down 26 basis points, and Texas, down 20 basis points.

Side effects from Hurricanes Harvey and Irma pushed delinquencies down.

Collections often halt when disasters occur, so there's not as much delinquency being reported, said Melinda Zabritski, senior director of automotive finance at Experian. "If I look [beyond] Florida and Texas, [delinquencies were] relatively flat," she said.

The overall delinquency drop doesn't tell the whole story in this case. But as credit scores rise and lenders continue to pull back on subprime lending, Zabritski predicts that delinquency rates will truly improve soon -- without a natural disaster.

You can reach Hannah Lutz at hlutz@crain.com -- Follow Hannah on Twitter: @hm_lutz

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