U.S. car shoppers appear to be getting back on track with their car loans.
There has been a 19.7% drop in past due payments in the first half of this year, according to TransUnion, a credit bureau that tracks the national 60-day delinquency rate for auto loans. TransUnion defines delinquency as being past due on a car loan for more than 60 days.
Average auto debt rose to $12,643 from $12,501, a 1.13% increase. A rise in loan amounts is one reflection of lenders increased wiliness to lend. Auto originations increased by 18.7%, which is the largest increase in new loans since the recession began in 2007, TransUnion found.
These changes have a lot to do with the continuing strengthening of the U.S. economy, which expanded by 1.6% in the second quarter.
Year over year, late payments have dropped nationally by 27.4%, the largest decline since summer 2001, according to TransUnion.
It’s important to note that delinquency in auto financing is very low already, with only 0.53% of auto loans being 60 days behind. In comparison, the U.S. mortgage delinquency rate stood at 9.85% in the second quarter, according to the Mortgage Bankers Association.