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Credit bureau TransUnion releases its annual auto delinquency report with the forecast of a rise in the delinquency rate that is not god news for consumers in the bad credit car loan sector.

TransUnion report

At Auto Credit Express, we see that TransUnion has released its latest report on automotive lending. The auto delinquency forecast from TransUnion, one of the three major credit bureaus, is culled from a huge database consisting of 27 million consumer records that are randomly sampled every quarter. As such, it’s fair to assume that the results are relatively accurate.

According to Trans Union, the national auto loan delinquency rate will increase by approximately 7% by the end of 2010.

The analysis

“Our forecast indicates we will see auto loan delinquencies drop in the first and second quarters of 2010 due to many factors such as ‘cash for clunkers’ and tightening lending standards,” said Peter Turek, automotive vice president in TransUnion’s financial services group. “Delinquencies will rise in the second half of 2010 as economic pressures, along with traditional spending patterns of summer vacations, back to school and the holidays, will continue to strain consumers. While the rate of increase should be relatively mild, it is a cautionary number to those expecting an abrupt turnaround in the auto finance industry.”

According to TransUnion, if this proves to be true, it will be the fifth straight year that the 60-day auto loan delinquency rate has either remained the same or increased from the prior year.

As we see it

The bottom line for bad credit car loan applicants is that fewer new auto loans are being made and that those loans are being subject to tighter lending standards. When comparing year over year car loan environments, this means that an individual with bad credit and a given credit score will be paying a higher interest rate (probably with a shorter loan term) and will be asked to put down a larger down payment in the current credit market.

At Auto Credit Express, our advice to consumers seeking bad credit car loans hasn’t changed since the beginning of the current recession:

•    Know your credit score and what’s contained in your credit report
•    Plan on coming into the loan with at least 10 percent down in cash or trade equity
•    Keep the loan term as short as possible
•    Buy a compact of midsize vehicle and put off looking at your dream car until after you’ve reestablished your credit.

Helping customers find the right dealer

For nearly 20 years, Auto Credit Express has been helping people with credit problems get approved for new and used car loans. Our dealer affiliates work with a broad spectrum of bad credit auto loan lenders to get you approved. Since our inception, we have processed over 1,000,000 online bad credit auto loans and closed over 1 Billion dollars in auto loans.

For more information, please visit www.autocreditexpress.com to see what we can do for you.

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