Those auto specialist who see the glass as half empty when it comes to the economic recession may need to consider a change of tune, reports the Wall Street Journal. Credit agency TransUnion has conducted a study indicating that auto loan late payment rates of 60 days or more has fallen noticeably within the past quarter of 2010. Along with TransUnion’s recent announcement concerning reduced percentage of credit card late payment, this is the great news for which a recession-choked nation thirsts.
Buyers who turn out to be frugal slow down the transformation
Through the present recession, it has been difficult for consumers to return to the kind of big-ticket getting the automotive industry depends upon for business. Yet it has been a positive for car loan repayment habits, says Peter Turek of TransUnion.
”Although part of the reason for the turnaround in delinquency rates is the influence of new, lower risk loans, consumers do not see a quick fix to the short-term economic and employment situation,” exclaimed Turek.
Q2 results were 20 percent much better than Q1
Consumers 60 days late or more on their auto loans fell by .53. According to the Journal, this was a 20% over Quarter 1 late payment rates. Moreover, the decrease is the most significant to occur since the summer of 2001. Vermont came out on top when it comes to most improved payees, when Rhode Island, Utah and Montana came out on the bottom. A near 50 percent drop in Vermont (from 1 percent to .58 percent) is surely good news. On a parallel note, Hawaii’s rate of loan origination was lowest within the study. Milking old automobiles for everything they’re worth is probably less expensive than purchasing a gallon of milk in Hawaii, anyway.
But the news isn’t all good. TransUnion views a .6 percent increase in auto loan delinquency rates by year’s end. The probable cause would be the anticipated weight of holiday spending.
Additional reading
Wall Street Journal
online.wsj.com/article/BT-CO-20100830-703526.html
