When bills are due and the average person is strapped for cash, what takes priority?
According to the latest payment hierarchy report from TransUnion, consumers consider their auto payment to be the highest priority above mortgage and credit cards payments. In fact, TransUnion now believes that auto payments have been at the top of the pyramid since at least 2003, which is as far back as the report goes. The study found that from 2003 to 2013, the average delinquency rate for auto loans was 1.11 percent while mortgages reported 2.39 percent and credit cards were 2.46 percent.
In terms of the highest points each delinquency rate reached, auto loans peaked at 1.65 percent while mortgage reached an all-time high of 4.92 percent at one point. Credit card payments reached 3.99 percent. The economic recession in 2008 is when delinquencies reached their highest points, but auto payments were always highest priority as consumers valued having a vehicle more than anything else. Then again, mortgage and credit card payments typically take longer before consequences set in, while a vehicle repossession could happen in a matter of months.