Average auto loan debt set to rise in 2015

The average auto loan debt per borrower continues to rise nationwide as delinquency rates edge higher.

TransUnion's annual auto loan forecast calls for average debt per borrower to continue to rise to $18,244 at the end of 2015, marking 19 consecutive quarters of increases since the first quarter of 2011, when auto loan debt per borrower stood at $14,954.

Chicago-based TransUnion also expects the national auto loan delinquency rate - the ratio of borrowers 60 or more days past due - to end this year at 1.2 percent and increase slightly to 1.27 percent at the end of 2015.

'We expect the auto loan market to continue to perform exceptionally well in 2015, with more sales leading to continued increases in auto loan debt per borrower as the national portfolio gets younger on average,” said Peter Turek, automotive vice president in TransUnion's financial services business unit. 'We anticipate the economy to continue to improve next year, with a better employment picture helping the auto industry.”

While the auto loan delinquency rate has slowly risen to a point where it will be above 2010 levels, Turek said that still is far below the peaks observed in 2008 and 2009 when delinquencies were more than 30 basis points higher.

Since 2007, the auto loan delinquency rate has been as low as 0.86 percent in the second quarter of 2012 and as high as 1.59 percent in the fourth quarter of 2008. On average, the delinquency rate during the fourth quarter between 2007 and 2013 was 1.29 percent.

On a state level, auto loan delinquency rates are expected to rise in 38 states with the largest increases occurring in Rhode Island and Colorado (11 percent), Utah (9 percent), and Florida (7 percent). The biggest percentage declines are expected in Alaska (5 percent), Wyoming (3 percent) and Maryland (2 percent).