Auto loan delinquencies increased in the third quarter, but the market remains stable, according to analysts at Experian Automotive. The company released its quarterly State of the Automotive Finance Market report, showing an $86 billion bump in open loan balances since the same period last year, and an increase in market share for deep subprime and superprime borrowers, in addition to the higher delinquency rates.

In the third quarter, 2.66% of auto loans were 30 days past due, up from 2.56% of loans in the third quarter 2013. The 60-day delinquency rate increased, as well, from 0.68% to 0.74% of loans. Melinda Zabritski, Experian's senior director of automotive credit, said some of the increase can be attributed to a rise in subprime lending.

"While we have observed a rise in delinquencies over the past few quarters, it was to be expected due to the growth in subprime loans. We have to keep in mind that a majority of the market is still in the prime risk category," Zabritski was quoted as saying in a news release about the report. "Understanding the shifts in payment behavior and the industry's risk tolerance are important for the market because these insights can trigger actions that affect vehicle prices, loan terms or interest rates."

Auto loan delinquency rates follow a geographic trend: low in the North, high in the South. North Dakota had the lowest 30- and 60-day delinquency rates last quarter, and Mississippi had the highest. Here's a breakdown of the highest delinquency rates, by state (including the District of Columbia):

States With the Highest Delinquency Rates

Percentage of Loans 30 Days Past Due

5. Alabama, 3.49%

4. South Carolina, 3.66%

3. Louisiana, 3.71%

2. Washington, D.C., 4.02%

1. Mississippi, 4.49%

Percentage of Loans 60 Days Past Due

5. New Mexico, 1.01%

4. Alabama, 1.05%

3. Louisiana, 1.16%

2. Mississippi, 1.36%

1. Washington, D.C., 1.42%

Failing to pay your auto loan often leads to repossession, which leaves you in debt and without a car you may need for your job. In an ideal situation, you won't have an unaffordable car loan payment, but as soon as you realize you may not be able to make payments, figure out what you have to do so you don't damage your credit or lose your car. Here are some tips to consider if you have a car loan you can't afford.

Paid on time, auto loans can help you build credit, while helping you afford something you need. At the same time, falling behind on loan payments can seriously hurt your credit score and could make credit more expensive for you in the future. To see how missed payments might affect your credit, you can see two of your credit scores for free on Credit.com, with updates every 30 days.



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