SCHAUMBURG, Ill. -

Thanks to stronger payment performance, commercial banks and captive finance companies found it less necessary to go after assets in the fourth quarter.

Basically, the quarterly repossession rates pushed downward as 2010 closed. According to Experian Automotive’s analysis of the vehicle credit market, fourth-quarter repossession rates edged 6.1 percent lower. The fourth-quarter rate settled at 0.67 percent, down from the year-ago mark of 0.71 percent.

“That’s a really strong performance comparison there,” insisted Experian’s director of automotive credit Melinda Zabritski during a Webinar last week where she shared the company’s quarterly analysis.

Zabritski indicated the repossession rate in connection with commercial banks dropped 28.7 percent in the fourth quarter, ticking down to 0.36 percent from 0.51 percent at the close of 2009. The repo rate for captive finance companies also improved by double digits — 12.6 percent to be exact — to dip to 0.53 percent from 0.60 percent.

The overall fourth-quarter rate might have sunk even more had it not been for some mild increases associated with credit unions and other finance companies. Experian classifies other finance companies as organizations such as Santander, Consumer Portfolio Services and others that do not hold bank deposits.

Experian discovered the year-over-year jump for credit unions was 4.3 percent, coming in at a rate of 0.19 percent to finish 2010. The firm noted the rise for other finance companies was even higher at 5.7 percent, leaving that segment with a rate of 2.59 percent.

Zabritski didn’t have a breakdown by segment for all of 2010, but she pointed out the industry’s repossession rate settled at 2.68 percent. For 2009, she said it was 2.84 percent.

And in conjunction with her discussion about repossession, Zabritski also shared how average charge-off amounts improved dramatically as 2010 came to an end.

As an industry, Zabritski revealed the average charge-off amount was $7,594 in the fourth quarter. At the same point a year ago, it was $10,315.

Each of the fourth lending segments made strong year-over-year charge-off improvements during the fourth quarter:

—Commercial banks: $6,929 in 2010; $9.089 in 2009.

—Captive finance companies: $7,611 in 2010; $8,966 in 2009.

—Credit unions: $8,006 in 2010; $7,003 in 2009.

—Other finance companies: $7,888 in 2010; $11,616 in 2009.

“Those are pretty significant decreases,” Zabritski surmised. “The very strong improvements in charge-offs are being driven by the very strong wholesale prices were seeing in the marketplace.”

In wrapping up, Zabritski speculated that, “Hopefully we’ll see these rates continue to improve as we continue on through 2011.”

Editor’s Note: A complete rundown of Experian’s fourth-quarter industry analysis including more data about delinquency rates and which lenders held the greatest market share as 2010 concluded is coming Tuesday from SubPrime Auto Finance News. If you do not subscribe to receive the issues biweekly, you can add it to your subscription list here.