TransUnion, one of the three major credit bureaus, has reported record low car loan delinquency rates for the first quarter of 2011, leading to more favorable terms for car buyers for lenders.
The credit bureau tracks delinquency rates - defined as more than 60 days without a payment - to help lenders assess the risk of loaning out money. With more buyers paying their loans back, lenders are more willing to offer terms to borrowers, reports Auto News.
"As consumers' confidence in the economy improves, and with auto loan rates remaining at relatively low levels, more people are making auto purchases," said TransUnion automotive vice president Peter Turek. "Add to that the fact that consumers with auto loans are making timely payments and we're seeing delinquency rates at record low levels. Due to these record low levels and the competitive landscape of the industry, auto lenders are now shifting their attention to marketing and growth strategies."
As compared to the first quarter of 2010, delinquencies have fallen nearly 26 percent, reaching the lowest levels since TransUnion began tracking the figure in 1999. In addition, more buyers were taking on car loans, with new loans up 22 percent when compared to the previous year.