Banks Are FINALLY Getting NERVOUS | Repos Keep Going UP!

TransUnion Data:

All right dad the latest data from transunion yes quarterly update on the state of auto loans uh not looking good uh well you know it’s it’s looked better let’s read the headline here again from transunion one of the big three credit bureaus auto loan delinquencies on the rise but consumers continue to place great value on such loans do you know what that

Means when they say um the lincoln shoes are on the rise but consumers continue to place great value on such loans what does that mean dad it means they’ll stop paying their credit card bills before they stop making their car payment a new transunion study quote a critical eye on auto performance found that despite an increase in serious auto loan delinquencies

Consumers possessing multiple credit products continue to value auto loans nearly as much as mortgage mortgages and much more than credit cards i love this consumers possessing multiple credit products why can’t we just say consumers in debt we will uh let’s get into the data we’ll also tie this back to the latest cfpb data that we referenced okay earlier this

Year and then yeah let’s get your take on the state of the economy a little bit as well dad just the way we we phrase things yeah seriously all right the the meat and potatoes here yes the piece that really stood out to me dad is point in time auto loan delinquency rates from q2 2018 to q2 2022 okay so we don’t even have q3 numbers yet this is which will probably

Be worse i mean yes like any every leading indicator we have suggests the q3 credit uh performance will be worse consumer credit performance will be worse here’s what you need to look at deb 90 days past due yes the bottom line on the table there in 2018 it was 0.39 okay in 2019 it was 0.41 in 2020 it was point eight percent so we saw a significant increase in

2020. 2021 it was point six five percent it has bumped back up to 0.79 we are seeing more people it’s more than double where we were in 2018. more people 90 days past due on their car 90 days plus yep past due so that could be 120 150 days past due but typically when once you start reaching the 90 days plus past due um you’re you’re in line for uh a reposition

Possession you’re in line to come out to your car one day and it just not be there 60 day past due or more we’re up to 1.43 the highest we’ve ever seen in the past five years 30 days past day we’re up to 3.34 that’s up an entire point dad nearly an entire point from a year ago yes like let that sink in for a moment yes that’s huge um yes we you can and when you

Look at these numbers you can see an ebb and flow to delinquencies yep um and my my guess is that there’s going to be a greater flow of the delinquencies moving forward as interest rates continue to go up in and inflation continues to rear its ugly hit so you’re thinking about selling your car go to join yaa.com sell and just enter the information once and get

All the offers in one place it’s just that simple now we get these reports from the big credit bureaus every so often they typically do them yeah quarterly one of the other things that transunion looked at was the vintage performance and we talked about this and we have a great article back on the join yaa website that breaks down the cfpb’s vintage data and

Essentially what a vintage is is how did a cohort perform over time relative to other cohorts so for example what we’re looking at here is how did a particular cohort so a group that was originated within a particular quarter q1 q2 q3 and q4 of any given year how did it perform then six months later so we’re saying how did that vintage mature we do the same thing

With the cfpp data so what we’re looking at here dad is q4 in particular okay q4 loans that originated in q4 of 2019. six months later 1.1 uh one one percent of them had begun to go delinquent a low enough percentage that on your people can work on that’s fine yeah bags can work yeah in 2021 that same group people who originated in q4 in 2021 so we’re not even

In the 2022. well no this this would be people who who originated in q2 of 2021 nope and then six months later nope okay whatever it just seems to me it would be they would have had to originate six months before no no they then track them for six months okay okay so what you’re saying the group that originated in q4 of 2019. okay so six months later six months

Later okay so in june of for that group in june of 2020 yeah 1.11 of them had gone delinquent yes then we compare that to the vintage of q4 of 2021 people who originated loans in october november december of 2021. so this is like not even before like aspects of our current financial crisis 1.32 so one are already delinquent by june of 2022. so we are starting to

See that the vintage performance is is performing worse than prior years when we look at the cfpb data that they they saw there was a 33 increase from the vintage of deep subprime borrowers two quarters in so after two quarters 33 more of them had gone default or you know had stopped gone to link but stop paying for their loan relative to prior years so it’s

When we start to look at these particular cohorts or vintages that we can see the leading indicators okay the performance is not as good as it has been in the past and it’ll probably continue to get worse and that’ll ultimately lead to more repossessed vehicles more repossessed vehicles end up on supplying the used car market should continue to push prices down

There and we’re in an environment where interest rates continue to go up so ultimately what this nets out to is a better buyer’s market sort of there’s going to be less demand and there’s going to be more supply so if you had to buy a car i guess it becomes a better market it’s really kind of crappy to think that like repossessed cars are going to become some

Of the supply in the used car market but like that’s what we’re seeing well you got to get supply from somewhere that’s what we’re seeing yes no absolutely

Transcribed from video
Banks Are FINALLY Getting NERVOUS | Repos Keep Going UP! By Your Advocate Alliance (YAA)