The percentage of top-rated borrowers who took out loans in 2006 and who were delinquent on their auto loans by at least 30 days jumped to 4.5% at the end of September, from 2.9% the previous month, according to a Lehman Brothers survey, reports The Wall Street Journal. In addition, 12% of subprime borrowers were delinquent on their 2006 auto loans as of September, compared with 11.1% during the previous month. The 12% mark represents the highest level since 2002. “The numbers will get worse for auto loans,” says Dan Castro of GSC Group, a New York firm that runs debt-related investment funds. “We're starting to see signs of rising losses, and delinquencies are creeping up.”
Auto Loan Delinquencies Increase