Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Dec 14, 2011

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Auto loan delinquencies are expected to remain at record lows throughout the upcoming year. This prediction is expected to hold true as the economy slowly gains strength, according to a press release by TransUnion.

 

For the last two years, auto loan delinquencies have been on a constant decline. TransUnion predicts 21 states will see delinquencies drop even further by the end of 2012.

 

The fourth quarter of 2008 marked the peak for auto loan delinquencies with 0.86 percent. But since that time, 60-day delinquency rates have dropped each year to the last recorded number of 0.59 percent. By the end of 2011 and 2012, that rate is expected to be at 0.51 percent.

 

“Auto loans have performed quite well since the beginning of 2012 and we expect delinquencies to remain relatively low throughout 2012 as the gradual recovery in the economy will benefit both lenders and consumers,” said Peter Turek, automotive vice president in TransUnions financial services business unit, in a TransUnion press release.

 

However the one bit of skepticism TransUnion has about their auto loan delinquency forecast is if an unanticipated drop in the economy occurs. In the event the economy suffers in the near future, delinquencies may elevate dramatically since so many auto loans have been recently originated, and, according to Turek, “missed payments often occur early on in the life of the loan.”

 

TransUnion believes their prediction will come to fruition based on various economic assumptions, such as declining unemployment rates, consumer attitude, households’ disposable income, and low interest rates. They feel their forecast will hold true so long as the nation sticks to a conservative economy and there are no unexpected shocks to hurt the economy.