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Auto loan delinquencies rise, but rate is still low

LOS ANGELES — More Americans fell behind on auto loan payments in the last three months of 2012, a time of the year when some borrowers’ financial obligations temporarily take a back seat to holiday shopping.

Still, the late-payment rate declined on an annualized basis and remained near the lowest point in more than a decade, said the credit reporting agency TransUnion.

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Many Americans are moving to replace vehicles after holding back for several years following the last recession. US auto sales grew 13.4 percent last year to 14.5 million and are projected to climb to 15.5 million this year.

Strong sales and low interest rates haves fueled a rise auto financing. As more borrowers have taken on auto loans, the ratio of those who have failed to make timely payments has diminished.

And most borrowers continue to make paying auto loans a priority.

‘‘Consumers are valuing their ­auto-related loans a little more ahead of other things when they do get a little bit stretched in their budgets,’’ said Peter Turek, a vice president at TransUnion.

The rate of auto loans with payments late by 60 days or more was 0.41 percent in the last three months of 2012. That was up from 0.38 percent in the previous quarter, but down from 0.46 percent a year earlier.

Turek noted the company always sees a slight uptick in the delinquency rate during the fourth quarter. The financial pressures of holiday shopping can lead some borrowers to delay or skip a loan payment.

Even so, the fourth quarter’s late-payment rate remained near the lowest rate on TransUnion records going back to 1999. That record low rate, 0.33 percent, was recorded in the second quarter of last year.

The national late-payment rate on auto loans peaked in the first three months of 2000 at 2.39 percent. All told, the rate has fallen on an annualized basis for 13 consecutive quarters. The trend has held up even as Americans have been taking on higher levels of auto-loan debt.

In the fourth quarter, bank auto debt per borrower increased for the seventh consecutive quarter, rising 5.4 percent to $13,747 from $13,045 a year earlier, TransUnion said.

One reason is banks are making more auto loans, which tend to have higher balances early on. The rise in auto sales also has spurred banks to step up lending to borrowers with less-than-stellar credit.

Some 32.4 percent of new auto loans issued in the July-September period were made to nonprime borrowers, up from 30.6 percent a year earlier. Nonprime borrowers score between 501 and 700 on the VantageScore credit scale, which runs between 501 and 990, with borrowers scoring at 900 or above being considered the safest credit bet.

Given the rise in lending to higher-risk borrowers, Turek expects the overall late-payment rate for auto loans to eventually go higher, too. But he anticipates that the delinquency rate will remain about the same in 2013’s first quarter.

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