TransUnion: National Auto Loan Delinquencies Hit Lowest Level on Record

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CHICAGO — In findings congruent with other industry
analysts, TransUnion discovered this morning that the national auto loan
delinquency rate — the rate of borrowers 60 or more days past due — reached its
lowest level since the firm began tracking the data in 1999.

TransUnion indicated auto loan delinquency rates in the
first quarter of this year dropped to 0.36 percent, down nearly 27 percent from
a year earlier when the level stood at 0.49 percent.

On a quarterly basis, analysts determined auto loan
delinquencies declined almost 22 percent from the closing quarter of 2011 when
it was 0.46 percent.

"Auto loan delinquencies continue to perform exceptionally.
This can be attributed primarily to growing demand for both new and used
vehicles and higher used vehicle values, which equates to an increase in equity
for consumers," said Peter Turek, automotive vice president in TransUnion's
financial services business unit.

"We are seeing increases in both lending and leasing across
the board, along with a higher number of loans originated in the non-prime risk
segments," Turek continued.

Between the fourth quarter of last year and the first
quarter of this year, TransUnion tabulated that 43 states experienced declines
in their auto delinquency rates.

On a more granular level, analysts tabulated only 34 percent
of metropolitan areas saw increases in their auto delinquency rates during the
first quarter. They noted this trend is down from the prior period where 44
percent of the MSAs experienced increases.

"We anticipate national auto loan delinquency rates to
remain relatively low for the remainder of the year, rising and decreasing with
traditional seasonal patterns," Turek projected.

"However, a slight increase from this record-low level would
not be surprising and should not be construed as a negative event as lenders
continue to originate more loans to consumers across all credit risk levels,"
he went on to say.

Analysts pointed out their latest report is part of TransUnion's
ongoing series of quarterly analyses of credit-active U.S. consumers and how
they are managing credit related to mortgages, credit cards and auto loans.

TransUnion explained its forecast is based on various
economic assumptions, such as unemployment rates, consumer sentiment,
disposable income and interest rates.

"The forecast changes as the economy deviates from a
conservative economic forecast or if there are unanticipated shocks to the
economy affecting recovery," analysts acknowledged.