TransUnion Reports More Borrowers Unable to Pay Auto Loans
Auto delinquency rates rose nearly 9 percent in the fourth-quarter last year as more borrowers were unable to pay their debts on time, according to credit reporting agency TransUnion.
The group blamed the record-high delinquency rates to the volatile economy, weak market, massive layoffs, and disposable incomes which are haunting American consumers.
Credit reporting agency TransUnion said auto delinquency rose by 8.9 percent in the fourth-quarter of 2008 compared to the previous year as more borrowers were unable to pay their debts on time, which is an alarming result that is the highest in decades.
According to TransUnion, auto loan delinquency cases are commonly recurring from time to time, with the last quarter usually having the lowest incidents. But in the case of the latest auto report, the group expects that the usual trend will be broken due to economic recession.
In an interview with a TransUnion official, he said that auto delinquency is only a result of weak economy, disposable income, massive layoffs, and low consumer confidence, adding the situation may even get worse as more economic problems unfold.
According to TransUnion report, Mississippi has the highest delinquency rates in the country with 1.62 percent and was followed by California with 1.46 percent and Louisiana with 1.37 percent. Meanwhile, Alaska, North Dakota, and Wyoming have the lowest auto loan delinquency with 0.19 percent, 0.34, and 0.41, respectively.
The credit reporting agency also said that auto credit has also declined for the past couple of months as lenders have become stricter in giving credit to consumers.
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