U.S. Auto Loan Indexes Give Mixed Signals in May

Moody’s auto loan indexes painted a mixed picture in May. Though much weaker than a year ago, there were small improvements from April in most areas. The exception was for delinquencies of over 60 days, which edged up.

“The net loss rate on securitized prime auto loans rose to 1.51%, an increase of 44% from its year-ago level of 1.05%. However, the net loss rate had improved month-over-month for the fifth consecutive month. Delinquencies increased in May, rising to 0.68% from the year-prior level of 0.49%. The unemployment rate continued to rise and had reached 9.5% in June – the highest since 1983. Used car values continued to improve as measured by the Manheim Used Vehicle Value Index. The index posted the fifth consecutive month-over-month improvement after reaching a historical low in December 2008.”

“The proportion of account balances for which a monthly payment is more than 60 days late was 0.68% in May 2009. This was a year-over-year increase of 39% from the May 2008 level of 0.49%.”

This marks the twenty-seventh consecutive month of year-over-year increase in delinquency rates. On a monthly basis, delinquencies rose 6% from the April 2009 level of 0.64%.