October auto default rate stays on par with historical trendline
While a bit higher than the year-ago reading, the latest auto-finance default rate included among the S&P/Experian Consumer Credit Default Indices is on par with what the metric has been in October multiple times during the past five years.
This week, S&P Dow Jones Indices and Experian released its data through October and reported the auto default rate ticked down by 2 basis points on a sequential basis to land at 1.03%. Last October, the reading stood at 0.92%, making the year-over-year climb register at 11 basis points.
But looking back at the historical data offered by S&P and Experian, the information shows the latest figure is at or even below what analysts spotted for the 10th month of the year. For example, in October 2017, the reading came in at 1.11%, tying for the high point of the year. And for October 2016, it was 1.08%, the high-water mark for that year, too.
And for reference, the reading in October 2015 stood at 1.00%, and in October 2014, it came in at 1.05%.
Meanwhile, the latest composite rate — which represents a comprehensive measure of changes in consumer credit defaults — remained unchanged in October, holding at 0.93%.
Analysts also reported the bank card default rate fell 44 basis points to 2.88%. and the first mortgage default rate increased 4 basis points to 0.77%.
Looking at the October data by geography, three of the five major metropolitan statistical areas tracked by S&P and Experian each month showed higher default rates compared to last month.
New York produced the largest increase, climbing 11 basis points to 1.07%.
The default rate for Dallas rose 4 basis points to 0.97%, while the rate for Miami ticked up 1 basis point, to 1.31%.
The level for Los Angeles dropped 7 basis points to 0.65%, while the rate for Chicago dipped 2 basis points lower to 1.17%.
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.