More defaults on car loans

The Detroit News reported that the rate of car payments 60 days or more late has risen 28% in the first quarter, compared with the first three months of 2008.  The rate continues to be fairly low, at 0.83% (eight loan payments out of a thousand).  Customers seem to have a larger problem making mortgage payments, with 60-day nonpayments rising 62% to 5.22% – five people out of a hundred failing to make payments for at least 60 days.

The hardest hit states for car loans are Mississippi (1.5%), Louisiana (1.4%), California (1.3%), and Nevada (1.3%). Michigan, despite numerous layoffs and factory closures, had a much better rate of 0.55% – better than the national average. These figures predate Chrysler’s two months in bankruptcy, but do reflect the tightening of credit which started in 2008.

The data comes from TransUnion, from random samples of 27 million credit reports. The company expects the number of late payments to get higher, hitting the 1% level experienced during the recession of 2001.

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