The third quarter or 2011 held a slightly higher rate of auto loan delinquencies than the second quarter, according to The Associated Press.
 
The delinquency rate is characterized by borrowers who are 60 or more days late on an auto loan payment. In the second quarter, 0.44 percent of car loan holders were labeled delinquent. In the third quarter (June to September) 0.47 percent proved delinquent.
 
But the credit reporting agency TransUnion says this increase is likely nothing to worry about—instead it can be attributed to typical yearly patterns and holiday pressures.
 
In fact, TransUnion’s automotive vice president of financial services Peter Turek said this current rate is near historically low levels. Before the recent recession, the delinquency rate for auto loans rested between 0.44 and 0.71 percent. And when compared to other loans’ delinquency rates, the sub 1 percent auto rate is miles lower than the real estate world’s 5.88 percent, according to TransUnion.
 
To explain this huge difference though, one can look at how the operating procedures of both industries varies. Auto loan lenders won’t hesitate to repossess a vehicle if payments are late by a few months. Mortgage lenders, on the other hand, have to go through the long and cumbersome foreclosure process to repossess a home. Also, many states declare mortgage loans as non-recourse, meaning lenders cannot legally pursue mortgage defaulters for the remainder of what they owe, whereas auto loan lenders usually can.
 
Even though mortgage delinquencies are high, and may continue to rise, TransUnion offers an optimistic forecast for auto delinquencies, predicting they will remain at the current low level throughout the next year.