Schaumburg, Ill. - Experian Automotive announced that consumers continued to make their loan payments on time in Q4 2013. According to its latest State of the Automotive Finance Market report, 30-day automotive loan delinquencies were down 3.5 percent (going from 2.72 percent in Q4 2012 to 2.63 percent in Q4 2013), and 60-delinquencies remained flat at 0.74 percent.
Additional findings from the report show outstanding automotive loan balances increased 11 percent from Q4 2012, reaching $798.5 billion in Q4 2013 (the highest level since Experian Automotive starting publicly reporting the data in 2007). The increase in open loans spanned across all lending types, with finance companies showing the greatest increase of 21.2 percent, followed by credit unions with 13.2 percent, then banks with 10.5 percent and captives by 5.3 percent.
"The automotive finance market continues to move along at a very healthy pace, and we are pleasantly surprised by the continued drop in delinquencies," said Melinda Zabritski, senior director of automotive finance. "The record level of open loan balances combined with the reduction in late payments shows that consumers who have purchased a vehicle are not only reliant on financing, but also firmly committed to making their payments on time."
The report also showed that repossessions were up 42.8 percent in Q4 2013, going from 0.46 percent in Q4 2012 to 0.65 percent in Q4 2013. However, the increase was driven entirely by finance companies that provide a significant majority of their loans to credit challenged customers. In Q4 2013, finance companies nearly doubled their repossession rate, jumping to 2.84 percent from 1.61 percent in Q4 2012.
Other lender types saw their repossession rates fall slightly:
Banks went from 0.24 percent in Q4 2012 to 0.23 percent in Q4 2013
Captives went from 0.36 percent in Q4 2012 to 0.34 percent in Q4 2013
Credit unions went from 0.16 percent in Q4 2012 to 0.15 percent in Q4 2013
"The increase in repossessions by finance companies could simply be attributed to a tightening of repo standards," Zabritski continued. "Aside from this increase, we are seeing the rest of the automotive finance industry trend positively, creating optimism for a strong 2014."
