More people making auto payments on time, Michigan leads the way
A credit reporting agency says the rate of overdue auto loans is at the lowest rate in more than ten years.
TransUnion says the rate of U.S. auto loan payments at least 60 days overdue fell in the second quarter to 0.33 percent. That's down about 25 percent from the same period last year and 8 percent from the first three months of this year.
Michigan is well below the national average, with 0.21 percent of borrowers delinquent on their car loans.
While fewer consumers are late on their debt repayments, borrowers are taking on about 5 percent more in auto loans than this time last year.
The auto loan delinquency rate peaked after the recession began in 2008, but has since fallen on an annual basis for 11 consecutive quarters.
In a press release, Peter Turek, automotive vice president in TransUnion's financial services business unit says he's not surprised to see these delinquency rates fall, because consumers care more than ever about making these payments on time.
"This is partly due to the need for transportation to get to work or to seek employment in a difficult job market. Additionally, consumers with car loans have more equity in their vehicle than they have in the recent past because of the strong used car vehicle market. Consumers want to keep their auto loan relationships in good standing," he said.
Turek says he estimates that the unusual low rates of auto loan delinquency will rise slightly over the year, but he expects them to remain low.
-Elaine Ezekiel, Michigan Radio Newsroom