Credit unions wanting to know the likelihood of 30-day and 60-day delinquency trends for their auto loan portfolio need look no further than a map of the United States.
Borrower behavior can be predicted by the state in which they live, according to Experian Automotive.
During a Thursday webinar titled, “State of the Automotive Finance Market Second Quarter 2014,” Melinda Zabritski, Experian senior director, identified the top 10 and bottom 10 states when it came to auto loan payment delinquencies.
In both the 30-day and 60-day delinquencies categories, the best and worst states were more or less the same; only the order in which they appeared was different.
When it came to 30-day delinquencies, the worst offenders and the percentage of borrowers delinquent in their payments in order of severity were: Mississippi (4.06%), the District of Columbia (3.58%), South Carolina (3.28%), Alabama (3.11%), Louisiana (3.11%), Georgia (3.07%), West Virginia (3%), Maryland (2.97%), North Carolina (2.94%) and New Mexico (2.9%).
The same states appear in the list of the highest 60-day delinquencies with only a change in order: Mississippi (1.09%), the District of Columbia (1.03%), Louisiana (1%), Alabama (.91%), South Carolina (.85%), Georgia (.84%), New Mexico (.83%), West Virginia (.77%), Maryland (.74%) and North Carolina (.73%).
There was a slight change among some of the players from 30-day to 60-day delinquencies when it came to states with the lowest delinquency rates but the lists still mostly repeated.
States with the lowest 30-day delinquency rates were: North Dakota (1.15%), South Dakota (1.24%), Oregon (1.36%), Minnesota (1.41%), Iowa (1.43%), Washington (1.43%), Wisconsin (1.5%), Utah (1.56%), Wyoming (1.63%) and Alaska (1.66%).
States with the lowest 60-day delinquency rates were: North Dakota (.29%), Oregon (.35%), Washington (.35%), Utah (.36%), Minnesota (.37%), Iowa (.38%), Alaska (.39%), South Dakota (.39%) Idaho (.41%) and New Hampshire (.42%).
Credit unions fared the worst of four different financers in terms of percent growth for both 30-day and 60-day delinquency rates, according to Experian.
Overall, 30-day delinquencies for credit unions increased to 1.34% from 1.28%, a 4.7% increase that's significantly higher than the 0.2% aggregate increase.
Delinquencies in this category increased 2.6% for finance companies, while decreasing 4.7% for banks and 2.9% for captive automotive finance companies.
The trend numbers are even more dramatic for 60-day delinquency rates, according to Experian's data. Credit unions rose to 0.31% from 0.27%, a 17.3% increase that compares unfavorably with the 7% increase for all auto lenders.
Finance companies posted a 7.6% increase, banks a 3.6% increase and captive financiers a 5% decrease in 60-day delinquencies.
An increase in credit unions' share of the auto loan market and more interest in subprime loans may have helped fuel the decline in credit union portfolio performance, Zabritski said.
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