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(EMAILWIRE.COM, March 28, 2013 ) San Francisco, CA -- Less Americans have fallen behind on their auto loan payments within the last three months of 2012, which was a time of year when some borrowers' obligations took a backseat to holiday spending.
Even beyond the seasonal spending, the late-payment rate on loans for vehicles declined on an annual basis, and remained near one of the lowest points of the last decade, according to TransUnion, a credit reporting agency.
The trend comes amongst a strong market for cars and trucks, with many Americans making moves to replace old and rundown vehicles after holding off on purchases for the last few years. The U.S. Auto sales grew by nearly 13.5% in 2012 to 14.5 million, and is projected to climb to an approximate million more.
The combination of a stronger auto-sale total, plus the lowered interest rates has helped push the rise in auto financing. As more borrowers have taken to loans, the ratio of those who failed to make payments has diminished as well. In addition, many borrowers continue to make payments on their loans a higher priority. The effect is likely due to more being directly aware of the consequences from falling behind, thanks to the recent economic downturn that affected so many.
"Consumers are valuing their auto-related loans a little more ahead of other things when they do get a little bit stretched in their budgets," said Peter Turek, automotive vice president in TransUnion's financial services business unit.
The rate of auto loans with late payments that exceeded 60 days was 0.41% within the last three months of 2012. That tally is up from 0.38% within the previous quarter, but still down from 0.46% in seen earlier in the year, according to TransUnion.
Turek noted that the company tends to see slight upticks in vehicular payment delinquencies around the fourth quarter. The pressures of the holiday shopping season tends to see some loaners skipping payments.
Even so, the fourth quarter's late-payment rate was near the lower end of the spectrum in regards to rates on the TransUnion's record that stretch back to 1999. The record low is 0.33% which was seen in the second quarter of 2012.
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