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Consumers are more likely to pay their auto loans before their credit cards and mortgages, according to recent research by TransUnion. It's been well-documented that consumers have started paying their credit cards before their mortgages, but car loans taking precedence over both is a new trend.
Consumers are more likely to remain current on their car loans because a car is usually needed for work transportation or to look for work and the chance of repossession is greater than having a credit card rescinded, according to Ezra Becker, vice president of research and consulting at TransUnion.
TransUnion's research found that, in 2011, 9.5 percent of consumers it studied were delinquent on their auto loans yet current on their credit cards and mortgages, while 17.5 percent were delinquent on a credit card but current on auto loans and mortgages, and 39.1 percent were delinquent on a mortgage while current on auto loans and credit cards. The trend is consistent in every state in the nation, though the percentages vary depending on the state.
Tara Baukus Mello writes the cars blog as well as the weekly Driving for Dollars column, providing both practical financial advice for consumers as well as insight into the latest developments in the automotive world. Follow her on Facebook here or on Twitter @SheDrives.
