A record number of Americans are behind on their car loans

[Yo_Mama_Been_Loggin]

More than 7 million Americans had auto loans that were 90 or more days past due at the end of 2018, according to a New York Federal reserve report, with auto loans overall at their the highest level in almost two decades.

The numbers are especially worrying given that there were more auto loans outstanding in 2018 than back in the waning days of the Great Recession in 2010. However, the growth has been attributed mostly to loans to customers with credit scores over 760, with just 22 percent of auto loans originating to subprime borrowers.

The increase in delinquent loans is most striking among younger borrowers and those with lower credit scores with subprime auto loans. Borrowers with credit scores below 620 saw their delinquency rates climb above 8% in the fourth quarter, which the Fed described as “surprising” given the strong labor market and economy.

"The substantial and growing number of distressed borrowers suggests that not all Americans have benefited from the strong labor market and warrants continued monitoring and analysis of this sector," said economists in the NY Fed’s report.

https://www.msn.com/en-us/money/personalfinance/a-record-number-of-americans-are-behind-on-their-car-loans/ar-BBVEhoZ?li=BBnbfcN

[wasupaloopa]

1. I got a temp job that pays very good and will last a

while.

They did a background check going back 35 years. Also blood and urine samples and a credit check.

Luckily I have a good credit score and no late payments.

But if I were laid off and missed some payments my score would go down and I most likely would not get the new assignment.

Meaning, many people with poor credit scores need a good paying job and they may be hurt because they were out of work and missed payments.

[watoos]

2. I believe that consumer debt, overall, is pretty bad.

[MarvinGardens]

3. New cars are entirely too expensive.

And it is my belief that the obscene prices are driven by the increasing willingness of the public to go into longer term debt to pay those prices. And now that prices are so high, a middle class person who wants a new car will almost always finance it. Vicious cycle.

[Yo_Mama_Been_Loggin]

4. $30,000 is the average price for a new car now.

[exboyfil]

6. I bought my last cars new in 2002 and 2009

There was very little price inflation between my 85 Cavalier and my 02 Cavalier. Such a car at those prices (even CPI adjusted) is no where to be found. I also made liberal use of the GM Rebate credit card for these purchases, but they changed the card on me. Probably a good thing since they are leaving the small car market.

I don't know what I will do when one of my cars dies. We have already decided to go down to one car. My daughter is driving my 2002 car until she buys her own. I told her to put it off as long as possible. We are getting by for now.

Definitely playing with the concept of no car when I retire. Just have to convince the wife.

[MarvinGardens]

12. I bought my first and only new car in 2007.

A Honda Civic. It was totaled last year and I replaced it with a used 08 Civic. They've both been good cars. But I don't forsee myself buying a new car ever again. Approx 3 years old is probably as new as I'll ever buy given these prices.

[Wellstone ruled]

5. Easy Credit has always

produced this Loan Bubble effect. Starting to see a similiar thing once again with the Mortgage loans. A form of No-Doc's is back.

[MichMan]

7. Higher sticker prices are driven by several factors

Consumers want higher cost standard equipment and options than when I first started driving many years ago. At one time people were OK with crank windows, AM/FM radios and rolling the windows down instead of A/C. Not any more.

Also there are more and more requirements on the automakers from rear cameras, tire pressure monitors, more sophisticated airbags and CAFE standards all play a part in making sticker prices higher.

In addition, with many customers leasing instead of buying, consumers are less sensitive to sticker prices

[handmade34]

8. I think

I'm one of the few left driving around with crank windows and no CD player... was forced to get car with air though (bought it new last year)

[sinkingfeeling]

10. You are not alone. 2 out of 3 of my cars have crank windows, and get this,

they all have manual transmissions! 1991, 1999, and 2002.

[MarvinGardens]

13. I wish there were more manuals out there.

I bought mine new in 07 (Civic). It was totaled a year ago, and in trying to replace it with a used equivalent, it was near impossible to find a stick shift.

[MichMan]

9. Customer; why dont they make basic cars that are affordable for the average person ?

Last edited Fri Apr 5, 2019, 04:20 PM - Edit history (1)

Salesperson "Here is our most affordable base model"

Customer. " I'm not driving that! There's nothing on it "