Auto delinquency have been on the decline over the past few weeks, but a new study finds that trend will likely end by mid-2010. The delinquency rate is expected to rise about 7 percent in 2010, marking the fifth straight year of worsening or stagnant rates.
According to TransUnion’s latest forecast, the delinquency rate for borrows at least 60 days behind on auto loans will climb to 0.92 percent by the end of 2010. In comparison, 0.86 percent of borrowers are expected to be at least 60 days behind by the end of 2009.
“It’s a relatively mild increase but certainly a cautionary number for those expecting an abrupt turnaround,†Peter Turek, automotive vice president of TransUnion’s financial services group, told Automotive News.
Delinquency rates are actually expected to improve during the first part of 2010 – which will likely accompany a slight boost in new car sales – but high unemployment rates coupled with summer vacations, back-to-school purchases and holiday spending will send rates back in the wrong direction.
Indiana, Michigan, Kentucky and Georgia are expected to see the sharpest increases in delinquency rates, with Georgia, Mississippi and Alabama expected to have the highest delinquency rates by the end of 2010.
