Auto loan payments that were more than 30 days late went up 1 percent when comparing the fourth quarter of 2009 with the same time the year before. The number of loans that were more than 60 days late on payment increased 3.5 percent between the two quarters.
“While delinquencies are still higher than the industry would like, we have not seen an alarming run-up in delinquencies like we did a year ago,” said Scott Waldron, president of Experian Automotive
Though delinquent accounts increased on a year-over-year basis, the dollar amount associated with these accounts went down. The fourth quarter of 2009 saw $26.58 billion in at-risk auto loans, down 10 percent from the $29.58 billion a year before.
The company also said that lenders loosened their credit standards when it came to used vehicles. Financing activity for subprime borrowers increased to 36.42 percent during the last quarter of 2009, compared to 33.99 percent during the third quarter. The average credit score for consumers who got loans for used vehicles dropped from 684 to 680.
However, auto loans granted to subprime borrowers for new cars decreased in that time, dropping 0.7 percent. Experian said the average credit score for new auto loans was 775 for the third and fourth quarters of last year.
While standards may have slipped a bit when it comes to credit scores and loans for used autos, lenders are still being careful when it comes to granting different forms of credit. In order to put themselves in the best position for a loan, experts advise consumers to avoid delinquencies while keeping the amount of credit they use to a minimum.
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