Traverse City Record-Eagle
---- — LOS ANGELES (AP) — More Americans fell behind on their auto loan payments in the last three months of 2012, a time of the year when some borrowers’ financial obligations temporarily take a backseat to spending on holiday shopping.
Beyond the seasonal increase, the late-payment rate on auto loans declined on an annual basis and remained near the lowest point in more than a decade, credit reporting agency TransUnion said Tuesday.
The trend comes amid a strong market for cars and trucks. Many Americans are moving to replace older vehicles after holding back on purchases for several years following the last recession.
U.S. auto sales grew 13.4 percent last year to 14.5 million and are projected to climb up to 15.5 million this year.
The combination of strong auto sales and low interest rates has fueled a rise auto financing. As more borrowers have taken on auto loans, the ratio of those who have failed to make timely payments has diminished.
In addition, most borrowers continue to make paying their auto loans a priority, a trend that grew more pronounced in the aftermath of the housing collapse and recession.
“Consumers are valuing their auto-related loans a little more ahead of other things when they do get a little bit stretched in their budgets,” said Peter Turek, automotive vice president in TransUnion’s financial services business unit.
The rate of auto loans with payments late by 60 days or more was 0.41 percent in the last three months of 2012. That’s up from 0.38 percent in the previous quarter, but down from 0.46 percent a year earlier, TransUnion said.
Turek noted that the company always sees a slight uptick in the auto loan delinquency rate during the fourth quarter. The financial pressures of holiday shopping can lead some borrowers to delay or skip a payment.