Americans are doing a better job of staying current on their car loan payments, according to a new report from Experian Automotive, a credit and automotive industry analysis group.
In a press release, Experian Automotive reports that in the second quarter of 2013, car repossessions fell by 14.8 percent. It’s the lowest rate of vehicle repossessions in seven years.
In the second quarter of 2013, Experian Automotive says, 0.36 percent of vehicle loans ended up in repossession. That’s a drop of 0.43 percent compared with the same period in 2012.
“Repossession and delinquency rates seen this quarter were lower than expected,” said Melinda Zabritski, Experian’s senior director of Automotive Credit. “The seasonality of the market usually has the first quarter showing the lowest 30-day delinquency rates, but even with the total automotive loan portfolio growing, consumers in the second quarter have done an exceptional job of meeting their financial obligations to keep the market strong.”
Even though car owners are doing a better job keeping up with their car loans, the automotive sector is responsible for a large amount of outstanding debt. Experian Automotive says the total outstanding balance of car loans stands at nearly $751 billion. That’s up from $682 billion in 2012, though the growth is attributed to strong car sales, which depend on people taking out loans.
The growth in car sales isn’t just due to people with perfect credit buying cars. Businessweek reports that 35.2 percent of auto loans taken out between April and June 2013 went to subprime buyers.
In the market for a new car? Make sure you stay up-to-date on your loan payments, and check out the U.S. News rankings of this year's best cars. Then, look for a great deal on a new car by checking out this month’s best car deals. Also, be sure to follow us on Twitter and Facebook.