CHICAGO – Delinquencies on auto loans plunged in the first quarter, falling 17.8 percent nationwide and 32.1 percent in Rhode Island, which had the third-sharpest decline nationwide, according to the latest analysis by TransUnion LLC.

Nationwide, the share of auto loans on which payments were at least 60 days overdue fell to 0.65 percent in the first quarter from 0.79 percent in the final quarter of 2007, the credit information company found. “Historically, there is a decrease in 60-day auto loan delinquencies between the fourth and first quarters,” TransUnion said. “However, the [nearly] 18-percent drop is the sharpest in four years.”

The sharpest improvements compared with the fourth quarter were seen in Hawaii, where delinquencies fell 41.7 percent to 0.60 percent of all auto loans; Maryland, where they fell 32.9 percent to 0.53 percent of auto loans; and Rhode Island, where delinquencies fell to 0.57 percent in the first quarter from 0.84 percent in the fourth quarter.

Delinquency rates were lowest in North Dakota (0.30 percent), Montana (0.35 percent) and Wyoming (0.37 percent).

“Even states that have the highest 60-day delinquency rates – like Louisiana [1.19 percent] and Alabama [1.07 percent] – have shown a decrease over the prior quarter,” Peter Turek, automotive vice president in TransUnion’s financial services group, said in a statement today. “According to the IRS, individual income tax refunds were larger (up 3.5 percent) and consumers filed earlier than in the previous year,” he noted. “It is plausible the tax refunds from the government are helping consumers with their debt burden.”

Compared with the first quarter of 2007, “auto loan delinquency rates … remained essentially flat,” TransUnion said, edging up to 0.65 percent nationwide from the year-ago 0.64 percent.

Average auto debt nationwide rose 0.7 percent compared with the fourth quarter to $12,833 per borrower, in what the credit data company described as “another sign of a potentially better auto finance market.” Compared with a year ago, auto debt rose 1.88 percent, or nearly $240 per borrower.

“The availability of home equity for financing auto purchases has diminished significantly in states like Nevada and Arizona, thus contributing to higher auto loan debt,” TransUnion’s Turek said. National mortgage debt per borrower edged up 0.29 percent in the first quarter to $191,917, or 5.38 percent above the year-ago level, the company found in a separate report last month.

Going forward, Turek added, “Our current forecasting models indicate that the national 60-day auto delinquency rate is expected to gradually rise from a value of 0.65 percent in the first quarter of 2008 to 0.75 percent by year end. This is not a material difference from the recent high of 0.79 in the fourth quarter of 2007, and the gradual increase might generally be attributed to seasonality effects in auto loan delinquency.

“However, we might see an as-yet unquantified reduction in auto loan delinquency, based on this 0.75 percent forecast,” he said, “as the more-conservative underwriting standards and more-aggressive collections efforts on the part of many auto lenders gain momentum and begin to bear fruit.”

TransUnionLLC, founded in 1968, is a credit information, data management and analysis company with operations in all 50 U.S. states. TransUnion employs has more than 3,100 employees in 25 nations on five continents. For more information, including the full 1Q “National Auto Loan Delinquencies” report, visit TransUnion.com.