Rancho Cucamonga, CA (PRWEB) April 25, 2013
As consumers gain faith in the market they become more willing to make major purchases, including new vehicles.
The study combines employment reports issued by the Bureau of Labor Statistics with the Federal Reserve’s Quarterly Report on Household Debt to show the correlation between auto loan debt and employment rates. It found that, between Q3 2009 and Q1 2013, auto loan borrowing consistently went up as unemployment rates went down.
Economist Mike Schenk told loans.org that as employment increases, so do family incomes. This increase in income makes consumers more willing to make large purchases.
Further research revealed that auto loan delinquencies declined with unemployment. In Q3 2009, unemployment was just over 9 percent and 90-day auto loan delinquencies were at nearly 5 percent. In Q1 2013, unemployment was under 8 percent and delinquencies were below 4 percent. The study found that increased cash flow, caused by increased employment, allowed more Americans to make timely payments on their auto loans.
To read the study in its entirety, please visit http://loans.org/auto/research/car-lending-in-recovering-economy, or visit the “Research” page at loans.org.
For additional information on auto loans please visit http://loans.org/auto
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