A new report published this week found that the cities with the largest populations are now facing the largest amount of motor loan delinquencies. Although this is to be expected to some degree, larger cities are usually more affluent and don’t see the same problems with motor loans that smaller cities experience. However, with the housing crunch affecting many, their motor loans are the first thing to go.”It is not surprising that the greatest levels of average auto loan debt are found in areas with some of the biggest population growth rates in the country, or where decentralized metropolitan areas make car ownership more of a necessity than a convenience,” said Ezra Becker, a principal consultant in TransUnion’s financial services group. “It is in these markets that demand is higher and thus prices are greater. It also may be that auto loans in these regions are relatively younger and hence have higher balances. Demand is lower and loans are more seasoned in states like Michigan, Nebraska, Maine and Ohio, thus balances are generally lower as the average auto loan gets closer to its payoff date.”"From a risk perspective, auto loan delinquency seems to mirror the continued economic downturn that has plagued southeastern states like Louisiana and Mississippi in the long wake of Hurricane Katrina, and has been indirectly exacerbated by the continuing mortgage crisis,” Becker added.
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