The Wall Street Journal-20080215-Overdue Auto Loans Climb to 10-Year High

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Overdue Auto Loans Climb to 10-Year High

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NEW YORK -- Auto loans that are at least two months delinquent hit a 10-year high in January, said Fitch Ratings, signaling the continued spread of consumer weakness to debts beyond homes and credit cards.

The firm, a unit of Fimalac SA of Paris, said 0.77% of U.S. prime and subprime auto asset-backed securities were more than 60 days behind on payments, with the rate jumping 12% from December and 44% from a year ago.

Subprime delinquencies topped the 4% level for the first time since late 1997, reaching 4.03% last month, up 10% from December and 43% from a year earlier.

Fitch's prime auto ABS annualized-net-loss index was at 1.28% in January, a 4.5% decline from December but 44% higher than a year earlier.

For subprime loans, the index rose 12% from December, to 8.48%, the highest level since January 2007.

Fitch said two weeks ago that it expected 2008 gross charge-off -- loans that card companies aren't able to collect -- to grow by at least 50%. Following the lead of mortgages and credit cards, auto-loan delinquencies have been on the upswing, in part because of the looser lending standards also plaguing other parts of the consumer-finance industry.