PODCAST: How TransUnion will monitor auto-finance health going forward


Like so many individuals, TransUnion described the auto-finance industry as healthy before the coronavirus pandemic arrived in earnest more than two months ago.

And in a special episode of the podcast, TransUnion senior vice president and automotive business leader Satyan Merchant described how he and fellow analysts will be monitoring auto-finance performance similarly to healthcare professionals.

As far as the first-quarter data, TransUnion reported delinquencies remained stable with contracts 60 days or more past due coming in at 1.37%. While analysts noted the last reading represented a slight uptick over the same period last year, the measurement has remained within a delinquency variation of 10 basis points for 11 straight quarters.

TransUnion determined the average new account balance continued to grow during the first quarter and reached an average of $22,764 per consumer — a 2.9% year-over-year increase. Analysts explained this movement stemmed largely due to consumers moving toward larger and more expensive vehicles such as trucks and SUVs.

While the average amount financed continued to rise, TransUnion noted the average monthly payment grew at a slower rate due to lengthening contract terms and a recent decline in annual percentage rate.

In fact, TransUnion pointed out APRs experienced their first year-over-year decline in Q4 2019 after 10 consecutive quarters of growth. Despite concerns around auto affordability, originations grew 3.1% year-over-year in the fourth quarter, compared to 1.7% year-over-year in Q4 2018.

Satyan Merchant

“Last quarter the auto market exhibited strong year-over-year origination growth and steady delinquencies, highlighting the underlying health of the market pre-COVID-19. In the current environment, external pressures such as high unemployment rates and low consumer confidence will exacerbate affordability challenges and impact future growth in the auto-finance market,” Merchant said in a news release.

“We anticipate the auto market will continue to face challenges in the wake of COVID-19 as dealers will be forced to transition away from brick and mortar operations,” he continued. However, we can expect digital innovation to help transform the space with an increasing number of consumers looking to such channels to initiate and complete the car-buying process.”

The information arrived from TransUnion’s Q1 2020 Industry Insights Report and Monthly Industry Snapshot Report that features insights on consumer credit trends around personal loans, auto financing, credit cards and mortgage loans. For more information, you can also register for the TransUnion Q1 2020 IIR Webinar on this website.

Additional resources for consumers looking to protect their credit during the COVID-19 pandemic can be found at transunion.com/covid-19.

Q1 2020 Auto Loan Trends

Auto Lending Metric

Q1 2020

Q1 2019

Q1 2018

Q1 2017

Number of Auto Loans

83.8 million

82.2 million

79.7 million

76.4 million

 Borrower-Level Delinquency Rate (60+ DPD)





Average Debt Per Borrower





Prior Quarter Originations*

6.9 million

6.7 million

6.6 million

6.7 million

Average Balance of New Auto Loans*





*Note: Originations are viewed one quarter in arrears to account for reporting lag. Source: TransUnion

And for the conversation with Merchant about the latest data and more, 

click on the link available below, or visit the Auto Remarketing Podcast page

Download and subscribe to the Auto Remarketing Podcast on iTunes or on Google Play

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