Top News

Delinquencies, Repossessions Up in 2013, Experian Automotive Reports

May 15, 2013

SCHAUMBURG, Ill. — Automotive loan delinquency and repossession rates increased in the first quarter of 2013, according to Experian Automotive’s latest State of Automotive Finance report.

Thirty-day auto loan delinquencies rose 1.3 percent, 60-day delinquencies increased 12.4 percent and repossessions rose 16.9 percent when compared with the previous year.

“Obviously, we never want to see a rise in delinquencies or repossessions, but when you compare the current findings with previous years, they are still lower than the recession-level rates,” said Melinda Zabritski, Experian Automotive’s senior director of automotive credit. “As we continue to move forward, we should start to see more increases as some of the subprime loans coming onto the books begin to deteriorate.

“However, one thing most lenders will agree upon is that today’s subprime borrower is less delinquent than those in the past.”

Findings from the report also showed that automotive repossessions jumped 16.9 percent, going from 0.43 percent in the first quarter 2012 to 0.50 percent in the first quarter 2013. While repossession rates for banks, captives and credit unions are all down year over year by as much as 14.9 percent, rates for finance companies increased by 52.1 percent. In spite of the increase, overall repossession rates are still relatively low when compared with the peak rate of 0.71 percent in the first quarter 2010.

Additionally, total dollar volume of automotive loans rose 9.6 percent to $726 billion in the first quarter 2013, compared with $663 billion in the year-ago quarter. Banks increased loan portfolios by $20 billion, finance companies by $18 billion, credit unions by $14 billion and captive finance companies by $12 billion.




Comments

  1. 1. Mike Dudic [ May 20, 2013 @ 12:00PM ]

    Although the article states that the bank and credit union repossessions are lower and the "finance company" repossessions are up, that isn't completely accurate. "Finance companies" are usually just car dealers that lend money in-house on a correspondent level with local credit unions and/or banks. In the industry this is called 'indirect lending'. In other words the banks are just giving the car dealer underwriting privledges. The trouble with this is that the car dealers' main objective is to sell cars, not to make good loans. In most cases the car dealers aren't on the hook for the repossession, and in fact are happy to re-sell the repo vehicles for another commission check assuming the credit union isn't selling the repo cars themselves already (i.e. http://www.repofinder.com). The cause of the repossession surge is scant regulation for indirect lenders more than anything.

 

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  

CLOSE [X]

READ NEXT

Marquet Intl.: Auto-Related Embezzlement Cases on the Rise

Marquet International released its annual white collar fraud and embezzlement report today. The report reveals that more automotive employees are embezzling than in previous years.