The number of auto loan delinquencies and defaults has long been acknowledged as one of the bellwethers of the economy’s condition. In the darkest days of the recession, people were failing to make the monthly payments for their cars in massive amounts. On that same token, one of the first signs that perhaps the economy was starting to right itself was the news that these numbers had begun to drop off a little. Experts point to the falling volume of delinquencies as a great indicator that we are finally seeing a true economic recovery, and not just another false alarm.
As reported by the American Bankers Association recently, just 3.15 percent of indirect auto loans (those financed through car dealerships, or anywhere other than a bank) were at least a month late in the last quarter of 2009. Just over two percent of bank-originated auto loans were late during the same time period. This is a huge improvement over the three months at the end of 2008, when indirect loans stood at 3.53 percent and direct loans rose over three percent. These numbers are still too high for the comfort of industry analysts. But there can be no doubt that they are indicative of an improvement, at least!
If you are at risk of falling behind on your auto loan, immediate action is of paramount importance. A delinquent auto loan can wreck your credit, and jeopardize your ability to get around every day. Most auto lenders will not come out and immediately repo your car after one month’s missed payment, but they have the right to under the terms if your loan contract. You should get in touch with your lender to discuss your options, which could include a loan modification.
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