Other data indicates borrowers are resolving past due loans.
Equifax found 2.14 percent of auto loans in the first six months of 2022 were more than 120 days behind on payments, according to Cox Automotive Chief Economist Jonathan Smoke, classifying them as in default. However, that was behind the 2.9 percent default rate Equifax reported for the pre-pandemic year of 2019, Smoke said.
Smoke said Cox expected 2022 would ultimately reach a 2.3 percent default rate — “among the lowest levels in the past 15 years.”
Historically, about 80 percent of defaults end in repossessions, and the repossession rate also is likely to be lower in 2022 than in 2019, Smoke said. In 2021, 1.1 million vehicles were repossessed — down 32 percent from 2019 levels and down 17 percent from the 2012-21 average, according to Manheim data Smoke cited.
“Due to a very low default rate and a smaller share of defaults turning into repossessions,” Smoke said, “the likely repossession rate in 2022 is currently, and will likely remain, very low by historical standards.”
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