Automotive credit continued to strengthen in the year-end quarter of 2010, as 30- and 60-day delinquencies exhibited sharp declines, according to Experian Automotive's quarterly analysis.

Thirty-day delinquencies dropped by 9.71 percent, from 3.30 percent in Q4 2009 to 2.98 percent in Q4 2010. Sixty-day delinquencies dropped 15.26 percent, from 0.94 percent in Q4 2009 to 0.79 percent in Q4 2010, reported F&I Showroom.

“The automotive credit market showed a significant improvement year over year during the fourth quarter of 2010,” said Scott Waldron, president of Experian Automotive. “Consumers are definitely doing a better job of making their payments on time, and that bodes well for everyone in the automotive and automotive credit businesses. We continued to see lenders loosening credit during the quarter for nonprime and subprime customers, who represent a significant portion of the automotive market.”

Findings from the report also show that the share of loans to credit-challenged new vehicle shoppers grew by 18.2 percent in Q4 2010 compared with Q4 2009. Share of loans to nonprime customers rose from 9.75 percent in Q4 2009 to 11.14 percent in Q4 2010. For subprime customers, share of loans jumped from 5.6 percent to 6.96 percent, while share of loans to deep-subprime customers rose from 1.44 percent to 1.74 percent.

For both new and used vehicles, the share of loans to nonprime, subprime and deep-subprime customers was up from 36.42 percent in Q4 2009 to 38.42 percent in Q4 2010. However, this still trails Q4 2007 and Q4 2008, when loan share for credit-challenged customers was 44.63 percent and 41.03 percent, respectively.

“The automotive lending industry continues to gather positive momentum,” said Melinda Zabritski, director of automotive credit for Experian Automotive. “The sharp drop in delinquencies is helping create stability in the marketplace and allowing lenders to develop a more aggressive approach. It is still a much more conservative lending climate than we saw in 2007 and 2008, but lenders are definitely becoming less risk averse.”

In other findings:

• The average credit score for a new-vehicle customer in Q4 2010 fell by eight points to 767 from 775 in Q4 2009.

• The average credit score for used-vehicle customers in Q4 2010 was 679, down just one point from Q4 2009.

• The average loan amount for a new vehicle jumped to $25,789 in Q4 2010 from $25,580 in Q4 2009.

• The average loan amount for a used vehicle jumped to $16,992 in Q4 2010 from $16,281 in Q4 2009.