Auto-default rise reaches 5 consecutive months
Auto defaults are moving counter to other credit segments.
Auto defaults rose for the fifth consecutive month in November, according to the S&P/Experian Consumer Credit Default Indices, but they are still below the reading that analysts pinpointed before the pandemic started.
On Tuesday, S&P Dow Jones Indices and Experian released data through November, showing that the auto-default rate rose 5 basis points to come in at 0.64%. The rate bottomed out at 0.40% in June, while in February, it stood at 0.89%.
For comparison, last November’s rate was 1.02%.
Meanwhile, S&P and Experian reported that their November composite rate — representing a comprehensive measure of changes in consumer credit defaults — actually dropped 7 basis points to 0.46%.
Analysts added that the bank card default rate fell 24 basis points to land at 2.56%, and the first mortgage rate dipped 7 basis points lower to 0.28%.
Looking at the top five metropolitan areas, S&P and Experian discovered each one registered a decline in November compared to the previous month.
Miami produced the largest decrease, dropping 27 basis points to 0.86%. New York came in 17 basis points lower at 0.41%, while Los Angeles’ rate fell 16 basis points to 0.37%.
While not as much, analysts added that the rate for Dallas dropped 5 basis points to 0.56%, while Chicago dipped 4 basis points lower to settle at 0.54%.
Jointly developed by S&P Indices and Experian, analysts noted the S&P/Experian Consumer Credit Default Indices are published monthly with the intent to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien.
The indices are calculated based on data extracted from Experian’s consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month.
Experian’s base of data contributors includes leading banks and mortgage companies and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.