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Past-due Auto Loans on the Rise

SCHAUMBURG, ILL.: Auto loans 60 days past due rose by 17 percent last year, according to Experian Automotive. The credit checker said about 1.04 percent of all auto loans were 60 days past due during 4Q08, compared to 0.89 percent in 4Q07. During the same period, 30-dya delinquencies rose nearly 10 percent to 3.06 percent. Combined, 30- and 60-day delinquencies accounted for nearly $29 billion, Experian estimated.

“There continues to be a steep climb in the number of people past due on their auto loans, which causes a negative ripple through the industry,” said Scott Waldron, president of Experian Automotive. “As more loans become delinquent, lenders begin to tighten their criteria for automotive lending. Ultimately, this makes it more challenging for consumers to find funding when they want to buy a car or truck and more difficult for dealers to help consumers secure financing.”

Local car dealers are the primary source of revenue for TV stations, though the category has diminished over the last year by roughly 25 percent. 

Experian, one of the big three credit scorers in the United States, said the average loan score for a new vehicle during 4Q08 was 765--12 points higher than in 4Q07. The increase was attributed to tighter loan criteria from lenders. Over the same period, overall consumer credit dropped. Out-standing loans to prime customers with scores 680 and above fell from nearly 58 percent to 56.6 percent. The drop makes it even harder for dealers to get financing for potential customers, Experian’s Melinda Zabritski said.

Auto loan delinquency rates were highest in Mississippi, Alabama, Georgia and South Carolina, and lowest in North Dakota, Arkansas, Montana and Wyoming.

The average loan for a new vehicle was $24,444 in 4Q08 compared to $24,782 in the first quarter of the year. For used vehicles, it was $15,904 compared to $16,582. Over the same period, small economy cars and “entry-level” SUVs increased in prime loan market share, up 29.4 and 24.2 percent respectively. Full-sized pickups and large SUVs decreased 17.3 and 13 percent during that time. -- Deborah D. McAdams