The composite rate of consumer credit default rates rose two basis points, to 0.85 percent, according to the S&P Dow Jones Indices and Experian data through July.

The consumer credit default indices represent a comprehensive measure of changes in consumer credit defaults.

The bank card default rate fell 13 basis points to 3.77 percent. The auto loan default rate was up two basis points to 0.89 percent, and the first mortgage default rate increased three basis points to 0.62 percent.

Four of the major metropolitan statistical areas showed higher default rates compared to last month. Los Angeles showed the largest increase, up 13 basis points to 0.74 percent. The default rate for Chicago rose seven basis points to 0.95 percent. The rate for New York rose two basis points to 0.89 percent while the rate for Dallas increased one basis point to 0.83 percent. Miami was the only MSA with a decrease in default rates, down nine basis points to 1.34 percent.

Lease Approvals Rise

August 19, 2019

Swapalease.com, a car lease marketplace, reports car lease credit applicants registered a 69.1 percent approval rate in July, a rise from the June rate of 65 percent. July experienced a strong number of applicants with qualifications for taking over another person’s lease, and a slight approval rating increase following a dip in approvals for June.

Lease approval ratings have seen some slight fluctuations since January. The average approval rating since January registered at 68.9 percent, just slightly below the historical “normal” average of 70 percent. The strong number of applicants perhaps was reflective of the recent strength in consumer confidence reported by The Conference Board.

“We expect to see an increase in applicants looking to take over another person’s lease in the upcoming months as uncertainty surrounding a potential economic slowdown sets in,” said Scot Hall, executive vice president of Swapalease.com.

According to the recently released J.D. Power 2019 U.S. Dealer Financing Satisfaction Study the ability to answer customer questions correctly the first time, facilitate electronic transactions and resolve contracts quickly is key to helping dealers successfully navigate the changing marketplace.

“Dealers are able to put together more attractive, seamless transactions for their customers when they are able to work in lock-step with lenders they trust to deliver fast, accurate and competitive products,” said Jim Houston, senior director, J.D. Power automotive finance intelligence.

“That relationship becomes more important as vehicle sales slow and more buyers may seek to secure financing outside of the dealership. Credit analysts and sales personnel perform some of the most important functions for dealers looking to match customer’s purchase with the right financial transaction.”

The 2019 U.S. Dealer Financing Satisfaction Study is based on 16,870 retail credit and 2,117 floor plan provider evaluations from dealer personnel, a 17 increase in response rate from the 2018 study. The study was fielded in April and May.

General Motors Financial Company Inc. announced net income of $403 million for the quarter ended June 30, compared to $271 million for the quarter ended March 31, and $442 million for the quarter ended June 30, 2018.

Retail loan originations were $7.1 billion for the quarter, compared to $7.2 billion for the quarter ended March 31, and $6 billion for the quarter ended June 30, 2018.

Accounts more than 60 days delinquent were 1.2 percent of the portfolio at June 30, and 1.3 percent at June 30, 2018. Annualized net charge-offs were 1.4 percent of average retail finance receivables for the quarter ended June 30, and 1.7 percent for the same period last year.

The average interest rate for a new-vehicle loan dropped for the third month in a row in July, hitting its lowest level of 2019. According to Edmunds, the annual percentage rate (APR) on new financed vehicles averaged 5.8 percent in July, compared to 6 percent in June. Edmunds data reveals that 35 percent of shoppers who financed their vehicle purchases in July got an interest rate below 4 percent, compared to 31 percent of those who financed purchases in June.

One reason average interest rates have dipped is due to automakers and dealers sweetening deals in an effort to clear out lingering 2018 models. Edmunds estimates 3 percent of new vehicles sold in July were 2018 models, the highest level of outgoing model-year sales of any July in Edmunds' records, dating back to 2002.

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