As the economy continues to pick up the pace, many people are opening their wallets once again in an effort to make the purchases they had been putting off. The auto market has experienced a surge in sales so far this year, and it seems as though consumers aren't in over their heads.
TransUnion reports the national auto loan delinquency rate hit the lowest level on record, indicating consumers are able to keep up with their car payments. The rate is measured by people who are 60 or more days past due on their bill. For the first quarter of 2012, the rate dropped to 0.36 percent, which indicated a 27 percent decrease from the first quarter of last year.
Analysts for TransUnion said these figures can be attributed to the fact that buying new or used cars is becoming a necessity for many people, particularly if they held onto their old model for longer than they should have. Peter Turek, automotive vice president of TransUnion's financial services business unit, indicates that the sector will continue to see an increase in lending and leasing, particularly in the non-prime risk segments.
"We anticipate national auto loan delinquency rates to remain relatively low for the remainder of the year, rising and decreasing with traditional seasonal patterns," Turek said. "However, a slight increase from this record-low level would not be surprising and should not be construed as a negative event, as lenders continue to originate more loans to consumers across all credit risk levels."
BusinessWeek reports that lenders are approving more auto loans now after pulling back the amount of money handed out due to the recession. As some people have faith in the improving economy, lenders are becoming more willing to help consumers afford their vehicle purchases, with many looking to expand their customer base.
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