Repossessions, Delinquencies Up As Oustanding Auto Loan Balances Hit All-Time High

Derek Kreindler
by Derek Kreindler

The latest Q2 2014 data from Experian was released this week, and key metrics like repossessions, loan delinquencies and outstanding balances have all seen increases.

Outstanding balances were up nearly 12 percent, rising to an all-time high of $839.1 billion dollars. 60-day delinquencies were up 7 percent to 0.62 percent in Q2, while 30-day delinquencies were up to 2.39 percent up from 2.38 percent year over year. Repossessions were up by 70 percent in the same time period, sitting at 0.62 percent.

Melinda Zabritski, Experian’s senior director of automotive finance, noted that ““The rosy glow of perfect payment performance in the automotive space is beginning to tarnish.” Despite Experian claiming that delinquencies were still at record lows, the total amount of loans that are 60-days delinquent has increased by $859-million, while 30 day delinquent loans have increased by $2.8 billion since Q2 2013.

A report by four analysts from the New York Fed acknowledged that while auto lending was growing rapidly, a sharp increase in subprime lending was due to the fact that this segment had been crippled during the 2008 financial crisis, when credit availability tightened.

Meanwhile, a change in the way FICO scores are calculated could make it easier for buyers to qualify for car loans. A report by Automotive News says that medical debt will be given less weight when calculating medical debts, while partial payment of debts will be taken into greater account. The new scores are also said to benefit those with little credit history, and should be rolled out by fall.

Derek Kreindler
Derek Kreindler

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  • Ruggles Ruggles on Aug 22, 2014

    RE: “We’re only willing to take these risks on write-downs and losses because the banks WILL be bailed out and the debt WILL be passed on across generations.” What banks were bailed out aqnd the debt passed on across generations? This is news to me. Are you aware TARP has made a profit?

  • Ruggles Ruggles on Aug 22, 2014

    RE: "Apples to apples, the same person who has 100k in debt derived from non-discretionary services rendered (they owe money because they had to have their house foundation are repaired) versus the same person who has 100k in debt derived from discretionary consumer goods purchases, with the same current income, has the same tolerance to assume further debt, all other things being equal." This is not the way our credit system works.

  • Ruggles Ruggles on Aug 22, 2014

    re: "The loans only affected those of us who neither made them nor took them out, because of bailouts and The Fed. Otherwise, there would simply be no conduit through which the stupid and the greedy could cause much harm to anyone but each other." HUH?

  • Stanczyk Stanczyk on Aug 23, 2014

    Another bubble is comming.. they will pack it into 'derivatives'('owners' from Wall-$) .. and you know how the scenario will develope.. Welcome to banksters-corporate america..