$1 Trillion Car-Loan Market Has Highest Delinquency Rate Since 2009
The rate of car-loan delinquencies in last year’s fourth quarter rose to its highest level since Q4 2009, according to credit analysis rock hard TransUnion (TRU), amid ongoing concerns about the sturdiness of the massive auto-loan industry.
The auto delinquency rate — or the rate of car buyers who were incapable make loan payments on time — rose 13.4% year over year to 1.44% in Q4, TransUnion’s latest Industry Insights Report said. In the last three months of 2009, when the U.S. economy was still reeling from the recession and financial crisis, the delinquency rate was 1.59%.
The auto business over the past year has signaled that the auto market’s long bull run — where sales have been helped along by generous loans and incentives — could be coming to an end, and the car-loan data are the latest indication.
General Motors (GM) still forecasts strong earnings this year but idled five plants in January and temporarily laid off some workers. Fiat Chrysler (FCAU) has also slowed production at some plants. Ford (F) said in October it would reduce production at plants that make the Escape compact SUV and F-150 pickup and recently said spending on electrical and autonomous cars will weigh on two thousand seventeen profits.
Auto sales from General Motors, Ford and Fiat Chrysler fell in January, despite leaning substantially on incentives, or deals that car dealerships suggest to customers or that automakers make to dealers.
Shares of General Motors fell 0.1% to 37.03 on the stock market today. Ford dipped 0.7% to 12.54, as it makes its way through a vapid base with a 13.37 buy point. Fiat Chrysler edged up 0.2% to 11.54.
IBD’S TAKE: Automakers and the tech industry alike are turning their attention toward ride-sharing services and self-driving cars. Last year, Apple, after a long period of speculation, said it was “investing strenuously in the examine of machine learning and automation, and is excited about the potential of automated systems in many areas, including transportation.”
The auto-loan market surpassed $1 trillion last year, and Experian Automotive in May recommended that auto lenders “keep a close eye on delinquency trends.”
And in November the Fresh York Fed warned that subprime loans, or loans given to borrowers with lower credit quality, were a “significant concern.” But it said that most car loans still remained solid.
Other areas of the loan market appeared to hold up in Q4, according to the TransUnion report.
The mortgage delinquency rate has fallen every quarter on a quarter-to-quarter basis since the third quarter of 2013, the report said. The credit-card delinquency rate was still well below what it was at the end of 2009.
However, the delinquency rate for private loans crept up in Q4 to Trio.83%, the highest for a Q4 in three years.
Car-Loan Delinquencies Hit Highest Level Since 2009, Stock News – Stock Market Analysis
$1 Trillion Car-Loan Market Has Highest Delinquency Rate Since 2009
The rate of car-loan delinquencies in last year’s fourth quarter rose to its highest level since Q4 2009, according to credit analysis rock-hard TransUnion (TRU), amid ongoing concerns about the sturdiness of the massive auto-loan industry.
The auto delinquency rate — or the rate of car buyers who were incapable make loan payments on time — rose 13.4% year over year to 1.44% in Q4, TransUnion’s latest Industry Insights Report said. In the last three months of 2009, when the U.S. economy was still reeling from the recession and financial crisis, the delinquency rate was 1.59%.
The auto business over the past year has signaled that the auto market’s long bull run — where sales have been helped along by generous loans and incentives — could be coming to an end, and the car-loan data are the latest indication.
General Motors (GM) still forecasts strong earnings this year but idled five plants in January and temporarily laid off some workers. Fiat Chrysler (FCAU) has also slowed production at some plants. Ford (F) said in October it would reduce production at plants that make the Escape compact SUV and F-150 pickup and recently said spending on electrical and autonomous cars will weigh on two thousand seventeen profits.
Auto sales from General Motors, Ford and Fiat Chrysler fell in January, despite leaning substantially on incentives, or deals that car dealerships suggest to customers or that automakers make to dealers.
Shares of General Motors fell 0.1% to 37.03 on the stock market today. Ford dipped 0.7% to 12.54, as it makes its way through a vapid base with a 13.37 buy point. Fiat Chrysler edged up 0.2% to 11.54.
IBD’S TAKE: Automakers and the tech industry alike are turning their attention toward ride-sharing services and self-driving cars. Last year, Apple, after a long period of speculation, said it was “investing strenuously in the examine of machine learning and automation, and is excited about the potential of automated systems in many areas, including transportation.”
The auto-loan market surpassed $1 trillion last year, and Experian Automotive in May recommended that auto lenders “keep a close eye on delinquency trends.”
And in November the Fresh York Fed warned that subprime loans, or loans given to borrowers with lower credit quality, were a “significant concern.” But it said that most car loans still remained solid.
Other areas of the loan market appeared to hold up in Q4, according to the TransUnion report.
The mortgage delinquency rate has fallen every quarter on a quarter-to-quarter basis since the third quarter of 2013, the report said. The credit-card delinquency rate was still well below what it was at the end of 2009.
However, the delinquency rate for private loans crept up in Q4 to Three.83%, the highest for a Q4 in three years.