It’s managed to happen again. The national auto loan delinquency rate hit its lowest level since TransUnion began to track the data in 1999. In 2Q12, the rate for borrowers 60 or more days past due fell to 0.33%, down from 0.36% in the previous quarter and down from 0.44% in 2Q11.

Consumers now value their auto loans more than their credit cards and mortgages, according to a recent TransUnion study. The reasoning: There is a need for transportation to get to work or to seek employment in a difficult job market. Additionally, consumers with car loans have more equity in their vehicle than they have in the recent past because of the strong used-car market. “Consumers want to keep their auto loan relationships in good standing," said Peter Turek, automotive vice president in TransUnion's financial services business unit.

Bank auto debt per borrower has risen to $13,427 in 2Q12, up 6% from $12,689 in 2Q11. Despite growing bank auto debt, the majority of states and cities are experiencing declines in their auto loan delinquency rates. Between 1Q12 and 2Q12, 37 states reported lower auto delinquency rates.

Year over year, the percentage of new auto loans to nonprime borrowers increased 9% in 2Q12, based on consumers with a VantageScore credit score lower than 700 on a scale of 501 to 990.
"With the increase in nonprime borrowing, we do anticipate that auto loan delinquencies will begin to increase," Turek said. "We are at such a low auto loan delinquency level -- far from normal standards -- that a slight rise through the end of the year should be expected, though the overall rate will likely remain relatively low."