In what could be more good news for bad credit car loan applicants the latest TransUnion report shows a year over year drop in auto loan delinquencies
How we can help
Before getting to today's news, if you're currently thinking of applying for a bad credit auto loan, you may be wondering about the current lending climate for bad credit borrowers.
We've heard this from many applicants lately here at Auto Credit Express, where our commitment to bad credit consumers extends to our web site. It features a bad credit car loan application – which we felt was needed after seeing the feelings of disappointment and frustration that customers with poor credit often experience if a dealer doesn't participate in second chance auto loans programs.
And while these people can always visit a tote the note lot, this won't solve their auto credit issues since these dealers usually don't report loans or loan payments to the credit bureaus and a higher percentage of loans end up in repossession.
So to help answer the question of the lending climate, here is some information from the latest TransUnion quarterly analysis of trends in the auto industry.
Earlier today, TransUnion released its latest report on automotive delinquency rates –dealing with auto loans in the fourth quarter of 2010.
According to the report, the national 60-day auto delinquency rate (borrowers 60 or more days past due) remained relatively flat in the fourth quarter of 2010. The rate, in fact, edged upward by only 1.72 percent between the third and fourth quarters of last year.
More importantly, however, the report also note that, “the year-over-year delinquency rate at the national level fell by 27.2 percent in the fourth quarter.”
"As expected, the national delinquency rate changed very little during the fourth quarter as this period typically exhibits the least amount of seasonality. The good news is that TransUnion expects national auto delinquency rates to continue to be well below the peak of 0.86 percent -- a rate experienced during the heart of the recession in the fourth quarter of 2008. This trend toward fiscal responsibility is reflected in year-over-year results, as auto delinquency rates now have dropped 27.2 percent since fourth quarter 2009. On a state-level basis, 18 states experienced a drop in their quarter-to-quarter delinquency rates, while only 3 states showed an increase on a year-over-year basis."
-Peter Turek, automotive vice president in TransUnion's financial services group
According to TransUnion, the 2011 60 plus day auto loan delinquency rate will continue to experience “seasonal ups and downs” – meaning it will fall by mid-year, then pick up again towards year end.
According to Turek, " Based on our current economic assumptions, TransUnion believes that the 60-day auto delinquency rate will continue to follow seasonal patterns and gradually begin to stabilize throughout 2011."
The Bottom Line
For applicants this means that most bad credit lenders will continue to increase the number of bad credit car loan originations to all types of credit-challenged consumers.
Although the report paints a positive picture of the auto lending climate, we offer this advice to credit-consumers:
• Know your credit score and what's contained in your credit report
• Plan on at least a 10 percent down payment either in cash or trade equity
• Keep the loan term as short as possible
• Finance either a compact or midsize car and put off buying anything else until after you've reestablished your car credit.
Choose Auto Credit Express
At Auto Credit Express, we specialize in placing customers with bad credit with dealers that can help them. These dealers are knowledgeable and work with a broad spectrum of lenders to ensure you have your best chance at getting approved for a car loan.
So if you are serious about getting your car credit back on track, you can begin now by filling out our bad credit auto loan application.