COSTA MESA, CA — A new report from Experian Automotive found U.S. car loans 60 days past due jumped 17 percent year-over-year in the fourth quarter of 2008, threatening further restrictions on subprime automotive finance.
Although 60-day delinquencies now represent barely more than 1 percent of all auto loans, such losses can convince lenders to finance fewer credit-challenged customers or raise those buyers' cost on each deal. That can be accomplished by raising interest rates or requiring larger down payments.
"A lot of lenders made changes in 2008 to their lending practices," Melinda Zabritski, Experian's director of automotive credit, told USA Today. "I expect to see that holding steady for the rest of this year."
Experian's report also found that: