Auto Loans Delinquent by 90 or More Days: Current Status and Trends
Auto loans have become a popular way for individuals to finance their vehicles, providing them with the convenience and flexibility to make payments over some time. However, with the rise of auto loans, comes the risk of loan delinquency. In this article, we will look closer at the current state and trends of auto loans delinquent by 90 or more days in the US.
Understanding Auto Loan Delinquency
Auto loan delinquency refers to the failure of a borrower to make timely payments on their car loan. This can result in various consequences such as repossession of the vehicle, damage to the borrower’s credit score, and legal action. The delinquency rate is calculated as the number of loans that are at least 90 days past due divided by the total number of loans outstanding.
Current Status of Auto Loans Delinquent by 90 or More Days
According to recent data, the auto loan delinquency rate in the US stands at 3.73% as of December 31, 2022. This decreased from 3.89% in September 2022 to 3.98% in December 2021. However, it is important to note that this number is still higher than the long-term average of 3.46%.
Trends in Auto Loan Delinquency
The trend in auto loan delinquency is important to track as it can provide insight into the state of the economy and the financial well-being of the population. According to the data, the average auto loan delinquency growth rate is 2.14%.
In the most recent quarter, there was a decrease in the delinquency rate from the previous quarter, with a value of 3.89% in September 2022 and 3.73% in December 2022, resulting in a change of -4.11%.
Compared to one year ago, there has also been a decrease in the delinquency rate from 3.98% in December 2021 to 3.73% in December 2022, which represents a change of -6.28%.
Implications of Auto Loan Delinquency
Auto loan delinquency can significantly impact both individuals and the overall economy. At the individual level, loan delinquency can lead to financial stress and potentially even bankruptcy. On a larger scale, it can contribute to a decline in consumer spending and a decrease in the economy’s overall health.
In addition, financial institutions that provide these loans can be impacted by an increase in delinquency rates. It can decrease their profits and potentially lead to a decline in the availability of auto loans for consumers.
Auto loan delinquency is an important factor to consider when financing a vehicle. While the current trend suggests a decrease in delinquency rates, the long-term average is still higher than the current rate. By staying informed about interest rates, loan terms, and making informed decisions, individuals can ensure that they are able to maintain their financial well-being and contribute to the overall health of the economy.