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The number of consumers that had an auto loan in the first quarter of 2016 reached 76.37 million, a 7.1 percent rise over the first quarter of 2015, TransUnion said.
The number of auto loans 60 or more days delinquent reached 1.12 percent of all loans in the first quarter, the highest rate since the first quarter of 2011, TransUnion said in its Industry Insights report today.
In fact, last quarter was the first time the 60-day delinquency rate topped 1 percent since the first quarter of 2011, when it was 1.02 percent.
The delinquency rate has jumped 13 percent through March this year compared with the first quarter of 2015, when it was 0.99 percent.
The decline in oil prices that has spurred job cuts in several states and a rise in lending to riskier borrowers drove the delinquency rate increase, Jason Laky, senior vice president and automotive and consumer lending business leader for TransUnion, told Automotive News.
Lenders have been “expanding their lending into nonprime and subprime consumers, and as that happens, the overall delinquency rate is naturally going to rise because the pool of borrowers is riskier,” he said.
But that means lending portfolios are growing, “and that’s a good thing,” Laky said.
There was a significant rise in delinquency rates in states whose economies depend on the energy industry, such as North Dakota, Oklahoma, Texas and West Virginia, where delinquency rates grew as much as 67 percent.
In the rest of the country, though, consumers are benefiting from low oil prices. That’s a “healthy aspect of the economy and lending environment now as we see the impact of buying deeper,” Laky said.
Rise in auto loans
The number of consumers that had an auto loan in the first quarter of 2016 reached 76.37 million, a 7.1 percent rise over the first quarter of 2015, TransUnion said.
“For the first time post-recession, more than 76 million consumers have an auto loan, a promising sign for the remainder of 2016,” Laky said in a statement.
Auto loan originations, which TransUnion reports one quarter behind to ensure all accounts are included, grew 5.4 percent to 6.51 million in the fourth quarter of 2015.
The average loan balance for new accounts in the fourth quarter of last year reached $20,469, a 2.9 percent increase from the first quarter of 2014 and the highest since TransUnion started reporting the data in 2009.
Delinquency rate tops 1% in Q1 on oil slump, riskier lending, TransUnion says
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