ABA: 1Q Indirect Auto Loan Delinquencies Up Slightly
WASHINGTON, D.C. — According to the American Bankers Association's Consumer Credit Bulletin, indirect auto loan delinquencies came in a bit higher in the first quarter at 2.73 percent, compared to 2.57 percent in the fourth quarter of last year.
Indirect auto loan delinquencies were also up when compared to the first quarter of 2006. Last year the statistic came in at 2.04 percent.
Meanwhile, direct auto loan delinquencies actually lessened slightly, coming in at 1.68 percent in the first quarter of this year, compared with 1.85 percent in the fourth quarter of last year.
When compared to the same time frame in 2006, ABA found that direct delinquencies were only off slightly. The average rate came in at 1.78 percent in 2006.
The association surveys commercial banks each quarter to compile its delinquency bulletin. The ABA defined delinquent payments as 30 days or more overdue.
Looking at other results, the ABA reported that credit card loan delinquencies declined in the first quarter of 2007.
Late payments on credit cards were 4.41 percent of all accounts in the first quarter, compared with 4.56 percent in the fourth quarter of 2006 (seasonally adjusted).
"The good news is that credit card delinquencies fell during the first quarter of 2007," said James Chessen, ABA's chief economist. "The improvement in credit card late payments is somewhat remarkable, given that the economy was not operating on all cylinders."
Chessen explained that slow job growth, falling home prices and weak economic growth helped to worsen consumers' financial position overall.
"There are still signs of consumer financial distress, which will continue throughout most of this year as the worst of the housing problem works its way through the economy," Chessen said, referring to the sharp increase in the composite ratio, particularly in housing.
The number of delinquent accounts in the composite ratio, which tracks eight closed-end installment loan categories, increased to 2.42 percent from 2.23 percent.
According to the ABA, this ratio has trended upward for the past year, reaching levels not seen since 2001.
"The increase in the first quarter of 2007 was driven in part by double-digit increases in home-equity loan delinquencies," Chessen said.
Sharing other statistics, the association found:
—Home equity loan delinquencies grew to 2.15 percent from 1.92 percent in the fourth quarter of last year.
—Delinquencies for home equity lines of credit were up from 0.57 percent to 0.60 percent.
—Property improvement loan delinquencies increased to 1.61 percent from 1.29 percent.
—Personal loan delinquencies inched up to 2.08 percent from 1.91 percent.
—Mobile home loan delinquencies grew from 2.82 percent to 2.94 percent.
—Marine loan delinquencies increased to 1.41 percent from 1.33 percent.
—Recreational vehicle loan delinquencies went up slightly to 1.03 percent from 0.96 percent.
"It's important that consumers who are having trouble meeting their financial obligations contact their lender immediately," Chessen pointed out. "Lenders are willing to work with borrowers during periods of financial stress, but ignoring the problem only makes the situation much worse."