One indicator of the status of our economy is the rate at which car owners are able to make payments, or rather, aren't. The rate at which owners can't get the check in the mail for their new car is called the delinquency rate, and according to a Los Angeles Times report, it has fallen to an all-time low.

Credit report entity TransUnion began tracking this data in 1999, which it calculates as the percentage of borrowers 60 or more days past due. Currently that rate was recorded at 0.33 in the first quarter and a full 25% lower than last year.

Auto sales in the U.S. have risen 14% in the first seven months of 2012 to 8.4 million vehicles. Experts suggest this is a result of more relaxed credit conditions, allowing buyers with poorer credit to find a way to purchase a new car. This trend could eventually result in the delinquency rate climbing back up.

"We are at such a low delinquency level" said Peter Tureck, automotive vice president for TransUnion's financial services business wing, "that a slight rise through the end of the year should be expected, though the overall rate will remain relatively low."

Which states have the highest delinquency rates in the country right now? That would be Louisiana, Mississippi, and Oklahoma, all of which are within the 0.55 area.


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    • 1 Second Ago
  • 21 Comments
      Diz
      • 2 Years Ago
      This doesn't indicate anything of the sort. It indicates that loan standards have tightened - drastically. Just ask any loan officer at any bank or CU.
      natron3030
      • 2 Years Ago
      Man that same asian girl didn't even test drive her car before buying it last week. Go go gadget stock photo.
      mylz
      • 2 Years Ago
      FIRE THEM! there are plenty of other people looking for jobs. Unions had their day, now its time for those winy little smucks to grow up and face reality. unions are great at causing companies to go belly up
        GreenN_Gold
        • 2 Years Ago
        @mylz
        Wrong article dude.
          Dr. Claw
          • 2 Years Ago
          @GreenN_Gold
          It was hilarious... it's so bad they even come frothing at the mouth at an unrelated article.
        kingrat001
        • 2 Years Ago
        @mylz
        You really need to read a little and well, learn something. Hating unions is crazy. They aren't and weren't the cause of the car company's failures, it's making shitty cars nobody wants.
      AngeloD
      • 2 Years Ago
      As a few others have pointed out, a low default/ deliquincy rate on auto loans is not a good indicator of the health of the US economy. Nor is the 14% rise in auto sales. That 14% rise is from an extremely low level of auto sales. It represents many people who simply can't keep their old cars going any longer. The age of the US auto/ light truck fleet is at an all time record. Pickup truck sales have still not recovered from the housing crash. The low auto loan default rate represents many people who have quit making payments on their home loans. Because of these people you also see an uptick in spending on meals eaten away from home, consumer electronics, etc. If it were not for the massive increases in Federal spending over the past four years (keep in mind Federal spending is included in GDP), the US economy would not have shown any growth in GDP. In fact, there has been NO economic recovery. We are still in the depression that started in 2008.
        axiomatik
        • 2 Years Ago
        @AngeloD
        It's not all doom and gloom. The low delinquency rate also reflects the fact that stricter credit requirements are keeping a lot of people out of the car market, because they either don't qualify for financing, or the financing that they do qualify has an interest rate too high to afford. The people who still buy cars in a recessionary economy, are more likely to be people who can actually afford a new car. I bought 2 new cars within the past year (one for myself, one for my wife), and it isn't because we stopped paying our mortgage. The cars we were driving were just plain old, and we decided it was time to replace them.
      Car Guy
      • 2 Years Ago
      It's good to see the credit market is making loans available to those who are truly responsible enough to handle it. The last thing we need is another credit free-for-all were anybody, no matter how irresponsible, was qualified for loans. We are still suffering from those poor policies of the late 90's - early 2000's.
      • 2 Years Ago
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        Pinhead
        • 2 Years Ago
        "which it calculates as the percentage of borrowers 60 or more days past due" - sounds like a lot to do with the actual delinquency rate to me, and nearly nothing to do with availability of credit?
      cooker263
      • 2 Years Ago
      Cheap credit? I think I remember this from a few years ago. In real terms, the gov't is paying people to spend money & leverage themselves because the natural rate would be much higher. Modern Keynesian economics is all about making people feel good and living in the present to either get re-elected or try to prop up our managed consumer economy. This is going to crush us in the future, unfortunately. Either rates go way up like they did in the 80s (unlikely) or your purchasing power will be wiped out. It's terrible.
        • 2 Years Ago
        @cooker263
        [blocked]
          Pinhead
          • 2 Years Ago
          Dude, get real - Bush was going to give Solyndra the same loan that Obama did. They had an innovative technology. Just because you hate Obama shouldn't give you carte blanche with the truth.
          cooker263
          • 2 Years Ago
          You have to peel away layers. In a managed economy, with manipulated rates, a central bank, monopolized fiat currency - bubbles and misallocations of resources are inevitable. Then the Keynesian thinking comes into play. The problem is - there's no real price signal - so supply and demand are artificially out of sync. Keynesianism is patchwork. Now, there were vast problems in the pre-Keynesian era - but those were largely due to the national banking act and the requirement through Civil war times of US debt-backed deposits. So Keynesian thinking is based on filling in holes on a failed economic system. It can "work" - but it also has pretty significant consequences and pretty much leads to the problems you've mentioned. It gives the government little restraint. You need markets that work like a vacuum. That is, no artificial adjustments to price signals - whether it be by boosting demand or supply. It has unintended consequences. In a true functioning marketplace (less the distortions), the intersection of supply and demand acts as if it has it's own gravitational pull. You are correct, however, that Keynesian theory has been distorted. Keynes would probably be pretty disappointed at the current state of affairs. I still think he's wrong though. The point is that markets are never perfect - but the interventions are usually worse - and I think there's a lot of evidence of that. Cheers.
          axiomatik
          • 2 Years Ago
          SonataGuy1 - You have no idea what Keynesian economics is about. Here's a Cliff's Notes version: When an economy goes into a recession (for whatever reason), spending in the economy decreases. People watching the news decide to put off big purchases, decide to increase their savings in case they get laid off, etc. This reduces their spending, so companies see less sales. Business leaders see the bad news, and decide to put off expansions or big equipment purchases, make sure they have enough cash on hand to weather the recession. This reduces their spending. The companies that supply them get less business. All these businesses that are seeing less sales decide to stop hiring new people, or to cut back hours, or to lay people off. Now all those employees have to reduce their spending further, and the cycle continues. This cycle continues until we hit the bottom of the recession. The economy can contract down to the point where only necessary purchases are made. People have to eat, they have to fix their car if it breaks down. Businesses have to buy paper when they run out, etc. The theory behind Keynesian Economics is that the government can step in and inject some spending to stop or slow the downward spiral. If you have a construction company, and you are about to lay off people because business is slow, if the government all of a sudden hires your company to do a bunch of work, now you don't have to lay off those people. Those employees won't have to ct back spending, because they will be gainfully employed. Your company will buy supplies from other companies. Those companies will get some more business. For it to work, the spending has to be proportional to the size of the economy and the size of the recession. In a $15 Trillion dollar economy, no one will notice an extra $50 million in spending. There's a flip side to this. When the economy is booming and doing well, the government should take money out of the economy. Either through higher taxes or reduced spending. This can help prevent bubble economies. In the mid-2000s, there was too much money and too much easy credit sloshing around the economy. People were buying and selling houses, with no intention of living in them, on easy credit. If the government had taken money out of the economy, there wouldn't have been so much easy credit floating around. It would have been harder for people to get loans for expensive houses. Interests rates would have been higher, making people rethink those mega-mortgages. Reducing the peak frenzy could have made the ensuing fall much more bearable. Plus, with increased tax revenues or decreased government spending during this time, the national debt could have been reduced.
        Stew
        • 2 Years Ago
        @cooker263
        Put the joint down, take a nap then comeback later.
      • 2 Years Ago
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      • 2 Years Ago
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