TransUnion Releases Data on Auto Debt, Delinquency Levels
CHICAGO — The latest statistics from TransUnion.com identified states throughout the country showing the highest average auto debt, along with the lowest.
Coming in with the highest median auto debt is Nevada, averaging $16,133. This state is followed by the District of Columbia, which averaged $15,818.
On the other side of the coin, the state with the lowest average auto debt is Michigan at $10,454.
Overall, average auto debt per borrower rose 0.13 percent in the fourth quarter to $12,738.
The data released from TransUnion.com covers the fourth quarter of 2007, which just recently became available.
Further breaking the statistics down, the company found that the steepest jumps in average auto debt, likely correlating to greatest demand, were in Oregon, up 3.55 percent; D.C., up 3.34 percent; and New Jersey, which climbed 1.91 percent.
At the other end of the spectrum, Montana displayed the largest decline in debt, down 3.7 percent, followed by Maryland, down 1.5 percent.
"From a risk perspective, auto loan delinquency seems to mirror the continued economic downturn that has plagued Southeastern states like Louisiana and Mississippi in the long wake of Hurricane Katrina, and has been indirectly exacerbated by the continuing mortgage crisis," pointed out Ezra Becker, a principal consultant in TransUnion's financial services group.
More specifically, the company indicated that auto loan delinquencies for borrowers 60 or more days past due came in at the highest in Louisiana at 1.44 percent, followed by Mississippi at 1.43 percent.
The lowest rates were discovered in Alaska at 0.16 percent, North Dakota at 0.40 percent and Wyoming at 0.47 percent.
"It's not surprising that the greatest levels of average auto loan debt are found in the areas with some of the biggest population growth rates in the country, or where decentralized metropolitan areas make car ownership more of a necessity than a convenience," noted Becker.
"It is in these markets that demand is higher and thus prices are greater," Becker continued. "It also may be that auto loans in these regions are relatively younger and hence have higher balances. Demand is lower and loans are more seasoned in states like Michigan, Nebraska, Maine and Ohio, thus balances are generally lower as the average auto loan gets closer to its payoff date."
Continuing on, the data discovered that California fell to third place for the highest delinquency from its historical spot at second highest, just behind Mississippi.
The most improved delinquency rates came from Alaska, down 41 percent; North Dakota, down 35 percent; and Oregon, down 12 percent. Officials attributed these declines not to the easing of consumer risk, but simply because the delinquency levels were quite low to begin with, meaning small decreases generally have a larger impact on percentages.
Looking ahead, the company predicted that the national 60-day delinquency rate will continue to climb 33 percent throughout the year from 0.79 percent in the fourth quarter of last year to 1.05 percent by the end of 2008.
Officials said this trend will match the expected deterioration in economic conditions throughout the nation, which is largely due to the mortgage crisis.
Forecasting delinquencies by state, TransUnion believes Mississippi will show the highest rate in 2008 at 1.4 percent, while Alaska will likely display the lowest level.