Auto loan delinquencies barely increased in the first quarter despite a continuing rise in car loan debt, credit bureau TransUnion says.
According to TransUnion, delinquencies of 60 or more days represented 1 percent of outstanding automotive debt, up from 0.95 percent in the first quarter of 2013.
While delinquencies stayed nearly flat overall, TransUnion said, consumers with credit scores of 640 and below continued to struggle. Delinquencies for that group reached 5.5 percent in the first quarter, up from 5.1 percent in the 2013 period.
TransUnion considers credit scores of 640 and below to be in the deeper end of the nonprime segment, which is defined as credit scores below 700.
Still, delinquencies “remain stable” and are “well within the expectations of the market,” said Pete Turek, vice president of automotive in TransUnion’s financial services business unit, during a phone interview on Monday.
TransUnion said the average auto loan debt outstanding per borrower in the first quarter was $16,862, an increase of $671, or 4.1 percent, from the year-earlier period.
Auto debt per borrower has increased nearly 13 percent, or more than $1,900, since the current rise began in the first quarter of 2011, TransUnion said. Consumers are willing to take on more debt, and lenders, experiencing low delinquencies, are willing to keep credit widely available, Turek said.
“Those two data points from a quarterly perspective mean the market still looks pretty good,” Turek said. “The industry is still on a growth cycle, even if the rate of growth may have slowed.”