Auto loan delinquency rates and repossessions rose in the first quarter fueled largely by an increase in subprime loans, Experian Automotive says.
Experian said auto loans delinquent by 60 days rose 12 percent and repossessions increased 17 percent compared with the first quarter of 2012. Loans delinquent 30 days showed a slight increase of 1 percent.
The rate of repossessions edged up to 0.5 percent from 0.43 percent.
"Obviously, we never want to see a rise in delinquencies or repossessions, but when you compare the current findings with previous years, they are still lower than the recession-level rates," said Melinda Zabritski, Experian's senior director of automotive credit.
In the fourth quarter of 2012, 60-day delinquencies rose 2.7 percent over the year-earlier period, while repossessions fell 27.6 percent.
"As we continue to move forward, we should start to see more increases as some of the subprime loans coming onto the books begin to deteriorate. However, one thing most lenders will agree upon is that today's subprime borrower is less delinquent than those in the past."
While banks, captives and credit unions all saw drops in repossession rates, some by as much as 15 percent, repossessions at finance companies increased by 52 percent, Experian said.
Zabriski said companies are lending more into the sections of the population that, in the past, have been prone to higher delinquency and repossession rates.
Overall, repossession rates are still relatively low when compared with the peak rate of 0.71 percent in the same quarter in 2010, Zabritski said.
"In comparison, looking at subprime loans today versus prerecession it appears consumers are doing a better job today of managing auto loans and continuing their payments," Zabritski said.
As the U.S. economy has recovered, auto lenders have relaxed credit standards.
"The lenders are out there," Zabritski said. "Now, it's just making the consumers aware that they are out there."
Fueled by the steady rebound in U.S. new light-vehicle sales, the volume of auto loans grew 10 percent during the period to $726 billion, Experian said.
Banks increased auto loan portfolios by $20 billion, finance company auto lending advanced by $18 billion, while loan volume increased by $14 billion at credit unions and by $12 billion at captive finance companies.