For example, a recent report from TransUnion says that the number of auto loan delinquencies is expected to rise to about 0.92 percent of the total by the end of 2010, marking a 7 percent gain over the current 0.86 percent level. The report noted that California is the only state that can expect to see delinquencies fall by the end of 2010.
“Delinquencies will rise in the second half of 2010 as economic pressures, along with traditional spending patterns of summer vacations, back to school and the holidays, will continue to strain consumers. While the rate of increase should be relatively mild, it is a cautionary number to those expecting an abrupt turnaround in the auto finance industry,” said Peter Turek of TransUnion’s financial services group.
If the current auto loan delinquency forecast does hold up, it would be the fifth consecutive year of such a trend on a year-over-year basis. Still, the forecast is also calling for loan delinquencies to decline somewhat in the first half of 2010, which could provide consumers with a certain degree of financial relief.
Some parts of the country are more likely than others to see stress related to auto loans, which could also be a sign of other troubles such as foreclosure and delinquent credit card accounts. According to the report, Indiana, Michigan and Kentucky will be among the states experiencing higher auto loan delinquencies.
On a regional basis, the Midwest and southeastern Indiana were also cited for their potential trouble with auto loans. In contrast, Florida and Nevada were expected to see their delinquency rates rise as well, but at a slower pace than the average.
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