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Auto Loan Delinquencies Surge 18% Among Young Americans

Tyler Durden's picture




 

Auto loan delinquency rates jumped nearly 13% in the last year, according to a new report by Transunion, with young (under-30) Americans seeing a 17.8% surge in 60+ day delinquency rates, as auto loan debt rose for the 14th straight quarter to $17,352. While these are notable rises, the overall levels remain low for now, but subprime-loan-delinquencies rose notably to 5.31%. However, in a somewhat stunningly blinkered conclusion, Transunion's Peter Terek notes "the uptick in delinquency reflects a healthy and thriving auto finance industry where credit is more broadly available to all consumers." So delinquencies are great news...

 

 

As Transunion reports,

Auto loan delinquency rates jumped nearly 13% in the last year to close Q3 2014 at 1.16%. At the same time, auto loan debt rose for the 14th straight quarter to $17,352. The latest TransUnion auto loan report also found that delinquency rates increased most for the youngest population subset with those under the age of 30 seeing a nearly 18% rise.

...

Auto loan debt per borrower rose 3.9% from $16,694 in Q3 2013 to $17,352 in Q3 2014. On a quarterly basis, auto loan debt increased 1.4% from $17,108 in Q2 2014. Auto loan balances rose in every state between Q3 2013 and Q3 2014. Among the largest U.S. cities, Phoenix, Atlanta and Chicago saw the largest yearly auto loan debt rises of approximately 5%.

 

Source: MarketWatch

 

TransUnion recorded 64.2 million auto loan accounts as of Q3 2014, up from 59.4 million in Q3 2013.

 

...

 

The subprime delinquency rate (those consumers with a VantageScore® 3.0 credit score lower than 601) increased from 4.50% in Q3 2013 to 5.31% in Q3 2014. The share of non-prime, higher risk loan originations (with a VantageScore® 3.0 credit score lower than 661) grew by 14 basis points (from 36.39% in Q2 2013 to 36.53% in Q2 2014). This percentage is higher than what was observed five years ago near the end of the recession (31.67% in Q2 2009).

 

Read full report here

*  *  *

We leave it to Mr. Turek to conclude:

"The uptick in delinquency reflects a healthy and thriving auto finance
industry where credit is more broadly available to all consumers."

Umm what?

 

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Mon, 11/24/2014 - 15:36 | 5482571 hedgeless_horseman
hedgeless_horseman's picture

 

 

There has never been a better time
to buy or lease
a new GM Obamamobile!

2014 CTS-V SEDAN
MSRP STARTING AT $64,900
FROM $64,900 - $73,035

Mon, 11/24/2014 - 15:37 | 5482590 SheepDog-One
SheepDog-One's picture

Wow, he just looks so excited about sitting in that piece of shit Explodobile.

Mon, 11/24/2014 - 15:45 | 5482619 InjectTheVenom
InjectTheVenom's picture

Hope & Change !

Mon, 11/24/2014 - 16:03 | 5482686 max2205
max2205's picture

And that's how we pay for Christmas bitceeezzz-z.   Yo

 

Fuck Fica

Mon, 11/24/2014 - 16:15 | 5482721 BKbroiler
BKbroiler's picture

Agreeing to pay 70K for a vehicle is crazy to me.  Picked up a 2004 Jeep with 129K miles, rebuilt the tranny, out the door at 7K with new tires.  Should last me an easy 5 years, then I can do it again.

Mon, 11/24/2014 - 16:22 | 5482748 RaceToTheBottom
RaceToTheBottom's picture

In a correctly running world, we would not care about late or default rates.  

It is only when the US taxpayer is on the hook for any loses that any financial institution achieves that we have to care about this shit.

Stop the madness

Mon, 11/24/2014 - 17:36 | 5483135 Haus-Targaryen
Haus-Targaryen's picture

My car (03 BMW 3 series) is paid for in cash.  I do a top-end rebuilt next month -- and it'll take me another 180k problem free.  

God I love this car, and God I love not having car-payments.  

Mon, 11/24/2014 - 20:23 | 5483835 tarabel
tarabel's picture

 

 

New top end + old oil rings = big black cloud behind you.

Mon, 11/24/2014 - 23:01 | 5484418 Tijuana Donkey Show
Tijuana Donkey Show's picture

He's just looking to coal roll some bitches with that Beemer. 

http://www.slate.com/articles/news_and_politics/politics/2014/07/rolling...

Tue, 11/25/2014 - 00:06 | 5484731 MontgomeryScott
MontgomeryScott's picture

WOW!

Where does one flesh roll stop, and another begin?

Old saggy top end + old overfed rolly-polly middle + fugly transfatted legs + avarice in the eyes = big black fugly cloud in the drivers' seat (along with the smell of rotting flesh covered up by perfume from France or somewhere).

Mon, 11/24/2014 - 17:20 | 5483073 malek
malek's picture

Not sure I would boast owning something that needed its transmission rebuilt after just 129k

Tue, 11/25/2014 - 00:13 | 5484779 MontgomeryScott
MontgomeryScott's picture

You're a PUSSY.

I know LOTS of people who bragged about 'supporting 'merkuh' back in 1996, after putting less than 70K on their Ford Tauruses ('Tortises', or whatever the fuck you called them). SOME of them started bragging as soon as 40K! I saw one who was bragging with only 38K! FORD was even putting RED TAGS on their transmissions, warning the mechanics NOT to pull the pan before calling a 1-800 number... that's how much THEY bragged about them...

Mon, 11/24/2014 - 15:51 | 5482646 chubbar
chubbar's picture

Sad thing is, I think it may be a "SHE"!

Tue, 11/25/2014 - 00:18 | 5484793 MontgomeryScott
MontgomeryScott's picture

No.

Too hard to tell.

Too many rolls in the oven.

Only a trained physician would be able to find out.

Mon, 11/24/2014 - 15:57 | 5482662 QQQBall
QQQBall's picture

they hoisted her in through the over-sized sun roof. NO way she fit through the door.

Mon, 11/24/2014 - 18:04 | 5483253 csmith
csmith's picture

Shaq...you KNOW you don't fit in that Buick!!!

Mon, 11/24/2014 - 15:41 | 5482604 angel_of_joy
angel_of_joy's picture

Why in the world would anybody buy such a piece of GM crap ? It's more expensive than a Lexus, and way less reliable. Oh, and the "luxury" styling is atrocious...

Mon, 11/24/2014 - 15:51 | 5482613 hedgeless_horseman
hedgeless_horseman's picture

 

 

Cuz it be built in Mo-Town by the brothers and haz da street cred.  Just ask the brothers pimpin' it in da hood. 

Mon, 11/24/2014 - 17:47 | 5483185 FreeShitter
FreeShitter's picture

because niggaz love american luxury

Mon, 11/24/2014 - 15:46 | 5482625 Skateboarder
Skateboarder's picture

May I suggest the removal of two letters in that term to make: "Obamobile".

Tue, 11/25/2014 - 00:27 | 5484830 MontgomeryScott
MontgomeryScott's picture

Obamobiles come with Obamaphones and built-in Obola-tracking GPS-enabled technologies.

Subscriptions to the Jewtooth technology that is required expire after 2016. Bush The Cousin or Billary are both expected to pass stools ('executive orders') that will continue this benefit well into the 2019-esque era.

I have revealed too much of the future.

Be assured that the FED has everything under control.

Signed,

(J. Yellen)

 

Mon, 11/24/2014 - 15:47 | 5482633 Hippocratic Oaf
Hippocratic Oaf's picture

If the Gubmint is stupid enough to start cash for clunkers again, just wait.

August 2010, Infiniti knocked $11k off a 3k mile 'demo' (driven by the dealer) and paid way too much for my Lexus as trade due to clunkers being crushed.

Win / win. There's always a time to take advantage of stupid beurocratic bullshit.

Love big momma in her new Caddy, HH

 

Oh.......and if you think stacking has gone away, think again.

Mon, 11/24/2014 - 18:16 | 5483303 malek
malek's picture

You must be in marketing... knocked $11k off without telling us what you finally did pay

Tue, 11/25/2014 - 00:37 | 5484854 MontgomeryScott
MontgomeryScott's picture

He bought a Cadillac for under 70K FEDS (new), and sold it to a poor sucker when it had 80,000 miles on it. The car now has 110,000 miles on it, and blew a head gasket (and the A.C. doesn't work, and the transmission is leaking, and the power window master switch failed, and...)

SERIOUSLY. Look at the guy and his avatar.

The car he 'stole' isn't worth $1,100 NOW.

Fucking CRUSH WEIGHT.

SHYSTERS getting over on SHYSTERS...

Mon, 11/24/2014 - 16:58 | 5482966 starman
starman's picture

If I hate anyone more then Obama that would be car sales man! Fucking slimy fucks!

Mon, 11/24/2014 - 15:34 | 5482581 SheepDog-One
SheepDog-One's picture

So all the little Millenials will expect this debt to be forgiven just like their tuition loans I'm sure.

Mon, 11/24/2014 - 15:41 | 5482602 silverer
silverer's picture

And the big Millenials, too.

Mon, 11/24/2014 - 15:58 | 5482670 sheikurbootie
sheikurbootie's picture

There are a shitload of fat ass Millenials.  I remember when the young fat girl was the exception.  WTF happened?  Stop eating you fat fucks!

Mon, 11/24/2014 - 16:22 | 5482757 RaceToTheBottom
RaceToTheBottom's picture

You want your GMO, you can keep your GMO, and you don't even know you are eating it.

 

Mon, 11/24/2014 - 16:00 | 5482678 Freedumb
Freedumb's picture

When the game is completely rigged, you'd be a fool to not try to cheat

Mon, 11/24/2014 - 17:27 | 5483100 Thirtyseven
Thirtyseven's picture

I'm still in the process of throwing my morals out the window.  It's hard, and my only regret is that I should've done it 7 or 8 years ago.  Heck, I might be used to it by now, might even have sucumbed to banker levels, or worse....real estate agent level morality.

Mon, 11/24/2014 - 15:35 | 5482584 SethDealer
SethDealer's picture

most dont have car insurance either

Mon, 11/24/2014 - 15:39 | 5482596 silverer
silverer's picture

Shhh... don't say default on the premiums. Remember, it's somebody else's fault...

Mon, 11/24/2014 - 16:50 | 5482909 Stoploss
Stoploss's picture

Default:

It is always default of some body else. (s)

Mon, 11/24/2014 - 15:37 | 5482585 Agstacker
Agstacker's picture

Bullish for repo men.

Mon, 11/24/2014 - 18:08 | 5483274 csmith
csmith's picture

Actually VERY BEARISH for repo men cause the GPS simply shuts off the vehicle and Mr. Repo goes and picks it up. Way more efficient so fewer repo men needed. Technology destroys another job category!!!

Mon, 11/24/2014 - 15:37 | 5482588 Racer
Racer's picture

Of course it is great news, more bailout money to be given to the banksters  /s

Mon, 11/24/2014 - 15:39 | 5482594 silverer
silverer's picture

Aw, come on. It's American folks. Nobody defaults unless they declare a default, and somebody else is always to blame. In the meantime, the loans are still going out.

Mon, 11/24/2014 - 15:39 | 5482597 IANAE
IANAE's picture

my question is whether the ALLL are tracking these 'industry' figures in bank/finco balance sheets and pnl...

Mon, 11/24/2014 - 15:41 | 5482603 ebworthen
ebworthen's picture

Imagine how much worse the delinquincies would be if Mom and Dad, and Grandma and Grandpa, weren't covering the asses of 60+% of those kids!

When the cash from reverse mortgages and HELOC's runs out there is going to be an epic wave of debt defaults that will make 2008-2009 look like a picnic!

Mon, 11/24/2014 - 15:47 | 5482628 Farmer Joe in B...
Farmer Joe in Brooklyn's picture

That brings up interesting point of reverse mortgages...

These things have been on the market for a while now.  When grandpa and grandma die off, the bank claims the home and sends it to market, right? 

I would think we'll start seeing more and more inventory from these in the coming years.  It's not gonna break the system, but sure as fuck isn't going to help.

Mon, 11/24/2014 - 15:53 | 5482650 Bell's 2 hearted
Bell's 2 hearted's picture

i didn't feel too old when Robert Wagner doing the ads

 

but the Fonz????

Mon, 11/24/2014 - 15:42 | 5482605 Seasmoke
Seasmoke's picture

That's the greatest reply ever !!!! Baghdad Bob has nothing on America any more. 

Mon, 11/24/2014 - 15:43 | 5482607 A Lunatic
A Lunatic's picture

What we need is a Presidential decree making auto ownership a basic human right....

Mon, 11/24/2014 - 15:44 | 5482615 Glass Seagull
Glass Seagull's picture

 

 

Looks similar to a map of African American demographics in US states. 

 

Just saying.

 

http://www.censusscope.org/us/map_nhblack.html

Mon, 11/24/2014 - 15:53 | 5482654 kchrisc
kchrisc's picture

Blacks, the canary in the DC US coal, police-state, mine.

What is coming for us, happens to them first.

We may not like them, but their plight will soon enough be our plight.

An American, not US subject.

Mon, 11/24/2014 - 17:12 | 5483036 froze25
froze25's picture

Wow, the state of Maine looks very good.  Who knew.

Mon, 11/24/2014 - 15:47 | 5482629 Hohum
Hohum's picture

Sure, trouble ahead, trouble behind. But an 18% rise on a small delinquency rate isn't too much to get worked up over.  So, BTFATH!

Mon, 11/24/2014 - 15:47 | 5482632 Bunga Bunga
Bunga Bunga's picture

Bullish, next bailout/stimulus imminent.

Mon, 11/24/2014 - 15:51 | 5482645 kchrisc
kchrisc's picture

Debt is the plow, fiat is the yoke.

Quit the yoke, abandon the plow, and guillotine the plow drivers..

An American, not US subject.

 

Mon, 11/24/2014 - 15:50 | 5482647 Bell's 2 hearted
Bell's 2 hearted's picture

"While these are notable rises, the overall levels remain low for now,"

 

i covered this earlier ... don't want to bore ... but a few things

 

1) Q3 rate of delinquency higher than any point of 2001 recession

2) the $ amount much higher than just a few years ago (~$12,500)

3) year over year increase surging ... 9% Q2 ... 13% Q3

 

no doubt, Q4 higher ... Q1 2015 even higher ...

Mon, 11/24/2014 - 15:52 | 5482653 IANAE
IANAE's picture

see my comment above...when these start flowing into pnl it could get interesting.

Mon, 11/24/2014 - 15:58 | 5482664 Bell's 2 hearted
Bell's 2 hearted's picture

even more interesting

 

OCC has warned on these souring loans OUTSIDE the banking system

 

if the wild wild west (unregulated) shadow banking goes tits up ...

 

... got popcorn?

Mon, 11/24/2014 - 18:10 | 5483282 csmith
csmith's picture

With instant repo, used car prices are gonna TANK!!!

Mon, 11/24/2014 - 15:55 | 5482656 Bell's 2 hearted
Bell's 2 hearted's picture

"The uptick in delinquency reflects a healthy and thriving auto finance
industry where credit is more broadly available to all consumers."

 

i can hear the faucet tightening

Mon, 11/24/2014 - 16:00 | 5482677 QQQBall
QQQBall's picture

thriving finance industry were shit loans are packaged and foisted off on yield-starved "investors."  The basis of USSA financing make bad loans to sucker auto buyers and dump them on sucker investors.

I want this shit to blow, but it is gonna be self-perpetuating toilet bowl swirl that gonna suck everything with it?

Mon, 11/24/2014 - 16:02 | 5482681 greatbeard
greatbeard's picture

That god that red state/blue state stats thing wern't revesed.  Bunch of god damned free loading won't work free shit army liberals.  Oh wait, never mind, just a bunch of hard working people trying to do the right thing but getting crushed by the jew bankers.

Mon, 11/24/2014 - 16:41 | 5482866 Monty Burns
Monty Burns's picture

People often assume states like Liousiana and Alabama are largely White (Southern racists etc.). However they're about 40% black.  Hence massive FSA numbers.

Mon, 11/24/2014 - 17:13 | 5483047 froze25
froze25's picture

The FSA is alive and well down south, not through the State programs but funded by the FEDS.

Mon, 11/24/2014 - 16:04 | 5482690 Bell's 2 hearted
Bell's 2 hearted's picture

when the october vehicle sales numbers came out

 

GM end of month dealer inventory went from 81 days to 94

 

Chrysler end of month dealer inventory went from 71 days to 84

 

Ford doesn't report this number

 

ballooning delinquencies and dealer inventory ... a recipe for "uh oh"

Mon, 11/24/2014 - 16:20 | 5482744 Rentenmark
Rentenmark's picture

And that's with 72 month financing everywhere!  Heck I've even seen 84 month financing advertised in certain situations. Anything to keep that payment low as the first question they ask you is what payment are you looking for.

Mon, 11/24/2014 - 16:06 | 5482691 BKbroiler
BKbroiler's picture

dupe

Mon, 11/24/2014 - 16:14 | 5482716 El Hosel
El Hosel's picture

No bubble is complete until every "Qualified"  teenager is driving upside down in a brand new car, with 60 month Zero down fuzzy financing.

Mon, 11/24/2014 - 16:19 | 5482733 IANAE
IANAE's picture

going to get ugly when the autos start plant shutdowns headed into year end...they likely overbuilt headed into midterms and will have to either give 'em away (lots of cash, not attractive) or cut production (preserves cash, more attractive).

Mon, 11/24/2014 - 16:16 | 5482725 mrdenis
mrdenis's picture

Actually I'm looking at a new Volvo ,the one my wife drives now is 16 yo ....I can't believe the prices 36K to 75K ..for a VOLVO .The salesman even told me if in qualify I can get a loan at 6.79% ....I don't take loans out ,my house is paid ...therein lies the rub no credit .I paid my daughters college fot 120K ,survived Sandy and now this guy tells me I haveno credit history .I din't know if shell go for but I'm now looking at antique cars low insurance ,cash and what's a few more dings ..... 

Mon, 11/24/2014 - 16:35 | 5482828 IANAE
IANAE's picture

shop for 2 model years old - first owner takes the heaviest depreciation and will shake out any real problems - if you time (what looks like an upcoming used car tsunami) you may be able to get serious deal.

Mon, 11/24/2014 - 20:47 | 5483922 kareninca
kareninca's picture

I have a friend who worked not long ago in a Volvo repair shop.  She said that Volvo repairs are astronomically expensive; insanely expensive.  And they are needed; Volvo's are not so reliable.  Why get a Volvo?  That's the status symbol of 30 years ago.

I would say get a Honda Accord, but there is that airbag thing.

Mon, 11/24/2014 - 16:15 | 5482726 Rentenmark
Rentenmark's picture

Need to legalize more immigrants to pick up the slack.  It's your patriotic duty to your new country to take on a 120 month car loan!

Mon, 11/24/2014 - 16:27 | 5482785 Lawn.Dart
Lawn.Dart's picture

LONG REPOMAN HOLDING

Mon, 11/24/2014 - 16:27 | 5482792 RaceToTheBottom
RaceToTheBottom's picture

For the states that have rules about kicking people out of houses when they don't pay the mortgage, does that still apply to people using their cars as houses?

 

Inquiring people want to know.

Mon, 11/24/2014 - 16:41 | 5482869 Skyprince
Skyprince's picture

But, but, Louisiana is the "happiest" state in the union.  

 

Mon, 11/24/2014 - 17:49 | 5483198 FreeShitter
FreeShitter's picture

Nation's capital of the FSA

Mon, 11/24/2014 - 16:47 | 5482892 Jonathan Equine...
Jonathan Equine Phallus's picture

here's the thing about the average young American:

They are fat, lazy, stupid, majored in something completely worthless, and have meticulously fostered a wholly misplaced sense of entitlement.

And they have reprehensible taste in music.

 

 

Mon, 11/24/2014 - 18:03 | 5483250 comob
Mon, 11/24/2014 - 21:35 | 5484088 ersatz007
ersatz007's picture

I just got an email about refinancing my car loan. From Wells Fargo. Are you fucking kidding me?? I didn't even know that was a thing.

Mon, 11/24/2014 - 21:35 | 5484089 ersatz007
ersatz007's picture

Dupe

Mon, 11/24/2014 - 21:35 | 5484090 ersatz007
ersatz007's picture

Tripe

Mon, 11/24/2014 - 23:37 | 5484599 AdvancingTime
AdvancingTime's picture

Many of the new cars hitting the road are really leases which show up as a sale, and many of them may be motivated because an automobile owner faced with a costly repair may be oping for this alternative verses putting money they do not have into their current ride.

This allows someone in a weak financial position, such as those living on disability or student loans, to kick the can down the road while putting themselves into an ego boosting vehicle, one that they cannot in reality afford, or need. I contend that super low artificial interest rates are making much of this possible. If I'm correct, much of the idea of "so called pent up demand" is secondary. More on why vehicle sales are so strong in the article below.

http://brucewilds.blogspot.com/2013/04/auto-sales-spooky-signal.html

Do NOT follow this link or you will be banned from the site!