LOS ANGELES (AP) — The rate of late payments for auto loans fell nationally in the first three months of the year to the lowest level in more than a decade, even as lenders financed more vehicle purchases for high-risk borrowers.
For the January to March quarter, the rate of U.S. auto loan payments at least 60 days overdue declined to 0.36 percent, or down about 27 percent from the same period last year, credit reporting agency TransUnion said Wednesday.
That's also down about 22 percent from the last three months of 2011.
The latest rate is the lowest since TransUnion began tracking auto loan data in 1999. The highest rate recorded by the company was 2.39 percent in the first quarter of 2000.
The auto loan delinquency rate has fallen on an annual basis for 10 consecutive quarters. One key reason: After the last recession, many borrowers made keeping up with their car payments a priority over other types of financial obligations, including credit cards and home loans.
"Consumers have done a very good job of adjusting to their ever-changing circumstances and managing their debt load," said Peter Turek, a vice president at TransUnion's financial services business unit. "The data show consumers are, in fact, paying their auto loans more on time than other loan products."
A lower rate of unpaid auto loans is good news for car shoppers, because it makes banks more willing to make auto loans, Turek added.
Low interest rates also have helped more car buyers qualify for financing.
While more borrowers made payments on time in the first quarter, they also had more debt in the form auto loans.
The average amount of auto loan debt owed by borrowers climbed about 5 percent from a year earlier to $13,272, said TransUnion, which culled data from a random sampling of about 27 million credit reports.
Many consumers moved to pay down debt and save money when the U.S. economy soured after 2007. Consumer confidence in the economy has shown some signs of improvement in recent months, and that's made some borrowers feel more comfortable taking on debt.
Sales of autos rose last month. And retail spending has been rising. The U.S. unemployment rate, while still high, has fallen a full percentage point since August to 8.1 percent last month — the lowest level since January 2009.
Lenders are not only making more auto loans, but lending more to borrowers with less-than-sterling credit, the company said.
Part of that is a reaction to a severe pullback in lending during the economic downturn.
One of the largest auto lenders, AmeriCredit, throttled back new car loans by 90 percent during the recession, Turek noted.
"Lenders are definitely looking at expanding and helping consumers who have challenged credit," he said.
Still, TransUnion anticipates the national auto loan delinquency rate will remain relatively low the rest of this year, barring any major shocks to the U.S. economy.