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What many automotive lenders fail to realize, though, is that the stakes are just as high for consumers. In fact, oftentimes, it’s their livelihood that is on the line. Without vehicle transportation, borrowers may struggle to get to work, get their kids to school, and do so many other things that we often take for granted. It’s no surprise then, really, that a new study affirms the importance consumers place on paying their auto loans on time.
The Transunion report, part of a wider study on consumers, found that consumers place a higher emphasis on paying their auto loans than they do both their credit cards and mortgages. According to the study’s co-author, Ezra Becker, this has been the case since at least 2003. “Even when home values were skyrocketing, even when unemployment levels were essentially at a point where we were at full employment, auto loans were still the first thing to get paid.”
The study, conducted over a 10-year period from 2003-2013, found that the auto loan delinquency rate over that period was 0.87 percent, while the delinquency rate for mortgages (1.71 percent), and credit cards (1.83 percent) were substantially higher.
These findings should be welcome news for automotive dealers and lenders, and will hopefully serve as a reminder to them that the majority of borrowers are responsible.
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