A decade after the Great Recession, delinquency rates are solidly below 2008 levels -- both pre- and post-crash -- as credit scores for auto loan borrowers have consistently risen during the recovery, TransUnion said Wednesday.
At the peak, in the fourth quarter of 2008, 1.64 percent of auto loans were 60 or more days past due. That compares with 1.22 percent in the second quarter of this year and 1.26 percent in the second quarter of 2008 before the economy collapsed.
On the credit score side, 60 percent of auto loan originations in the first quarter of 2008 were to borrowers with a score of 661 or higher, viewed as prime or above by most lenders. By the first quarter of 2018, that share had risen to 65 percent of borrowers.
"As the economy has improved, the consumer credit market has done a remarkable job of getting back to serving consumers with good products, healthy pricing," Matt Komos, vice president of research and consulting for TransUnion's financial services business unit, told Automotive News. "If you think about the lending environment compared to 10 years ago, a lot has changed, with technology, the speed of doing business, expectations of consumers when it comes to how they interact with their loan product. All of those factors have created a healthy ecosystem."
With a delinquency rate of less than 2 percent at peak, the auto loan portfolio performed best among major lending categories in the wake of the recession's start.