More drivers falling behind on their car payments

[LiberalArkie]

Source: USA Today

More people are falling at least two months behind in making payments on their auto loan, a new report showed Tuesday.

As more borrowers have qualified for loans amid higher national employment rates, and with new-car sales booming as a result, the total amount of auto loan debt climbed to $987 million in the fourth quarter, up 11.5% from the same quarter in the previous year, reports Experian Automotive. The credit-reporting service says that the total is the highest since it began keeping track in 2006.

Along with the rising auto loan tallies has come growth in serious delinquencies. The percentage of people who are at least 60 days behind on their payments rose to 0.77%, up from 0.72% in the same period in 2014. Experian says it's still short of a record. Sixty-day delinquencies reached 0.94% in 2009.

And the rate of those who are 30 days behind on payments fell in last year's fourth quarter to 2.57%, down from 2.62%

Read more: http://www.usatoday.com/story/money/cars/2016/02/09/more-drivers-falling-behind-their-car-payments/80058164/#

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And here we go again. Housing, now cars.

[onethatcares]

1. no shit sherlock,

I pay less for my mortgage payment than some folks do for their auto leases and they have nothing at end of term except the opportunity to grab more debt.

[jtuck004]

2. "...here we go again. < Note: Regardless of how they have been portrayed by self-serving politicians

many people have never recovered from the damage caused by the theft of the Bankter/jihadists of the past few years, especially since most of the assistance in the recovery went to the banks, not working people.

This takes away even more from what little they have been able to survive with so far.

[padfun]

3. I just got a second to pay off one car

I have two car payments totaling $950 and insurance of $200 per month. That is high because of a brand new Mustang I just got.

So a loan will help pay off the 2012 Mustang. And that still left me with enough to go South Lake Tahoe with about $3000 to try to win that car payment back. I am going next Monday. Extra payment is only $100 per month for now.

My only daughter recently died, so I learned even more to just live while you are alive. And I love driving Mustangs around the Sierra Nevada Range.

[LiberalArkie]

4. I think I would have to sell my heart to afford those payments as much as I would like the

Mustang.

[PasadenaTrudy]

12. Very sorry for your loss

Last edited Wed Feb 10, 2016, 10:48 PM - Edit history (1)

It must be really tough All we have is today, so enjoy that car!

[brett_jv]

28. Sorry for your loss, but am I understanding correctly ... you're planning to gamble money from a 2nd

mortgage ... in hopes of winning in TAHOE ... in order to pay off a car loan, or something along those lines?

If so, I just want to humbly caution you ... this is probably NOT what we call "the most sound financial strategy".

Unless, Dog forbid, you're in the final stages of an incurable illness and have no estate to speak of, nor any 'living relatives' ... in which case ... by all means, go out with a bang!

[trillion]

40. Deepest condolences on the loss of your daughter.

[earthside]

5. More evidence of the demise of the middle class.

Most of us haven't had a raise since before the Great Recession.

Our local and state taxes have gone up.
Government/school fees keep going up.

College tuitions keep surging upwards.
Health care premiums, co-pays and deductibles keep going up.

Tell us again how we are supposed to be satisfied with "reality", "pragmatic", and "reasonable"?

We can barely afford our cars anymore ... thanks goodness gasoline has come down, but that doesn't make up for all of the other cost of living increases.

[SoCalMusicLover]

6. Some Are To Blame For Their Own Problem

Having a new car or leasing a nice car is a luxury, not a necessity.

I still drive a 2004 vehicle, and probably could drive it for another 5-10 years. That means NO PAYMENTS, the car is mine except for the insurance payment.

Could I go into debt and buy a sparkling new 2016 car with 4 or 5 years of payments? Could I take out a 3 year lease and get a $30K car I could not afford, only to be left with nothing after it runs out?

I feel sympathy for some, but not those who live beyond their means, always needing to have the latest model from the tv commercials. There are Plenty of Used vehicles out there that won't break the bank debtwise, but image conscious folk will have none of that. A car owned by someone else previously? That was made 6 whole years ago? Practically an antique. No, instead of that $5,000 car, I'll take the NEW 2016 model for $25,000. And give me a financing deal to make it appear I have a chance to make the payments.

And don't do a budget, or plan for a rainy day....those never happen. Just feel confident you can make the payments TODAY, and worry about tomorrow later.

[redstateblues]

8. Perhaps we should have free cars?

transportation is a basic need.

[NickB79]

9. Free or cheap bus and train passes, perhaps, or even cheap/free bikes, but not free cars

The last thing we need is more cars on the road.

[Alittleliberal]

26. Those don't work for everyone.

Many people travel far for work outside of the city. Jobs are sparse and housing near these jobs is expensive. Most of the people in the Hudson Valley are traveling 40+ minutes for shitty service jobs in 20 year old beaters that take a car payments worth of repairs a month.

[NickB79]

37. Then they can keep driving and keep paying the price for it

There are no free lunches. Cheap vehicles and cheap gas are what drove people to move from the urban cores to suburbia in the first place, setting themselves up for hour-long commutes on jammed superhighways.

If we want to reduce carbon emissions and increase commuter services (rail, train, and bus), we need to reverse this trend and get more people to once again live close to their jobs, walk/ride more and drive less. The only realistic future for our cities revolves around the concept that the exurbs need to die and return to small farm towns, the suburbs need to become more densely populated, and the urban core must be rejuvenated.

It sounds harsh, because it is harsh, but there are no real alternatives. We should have been taxing the shit out of gasoline for decades, just as the Europeans have done. Anything less and people will invariably flock to big, inefficient vehicles (like they are doing again now that gas is below $2/gal again).

[Rod Beauvex]

23. Now you're thinking.

Cash for Clunkers had nothing to do with the economy or the environment, and everything to do with getting rid of all those still running 1980's 250K mile Japanese econoboxes and keeping the price of new cars artificially high. Everyone wins, except the average American.

[7962]

10. THANK YOU!!!! This is the problem with many people; keeping up with the Joneses.

I just dont see why people feel the need for a car that costs 30000. And those are the low end. And why not buy used? I have an 08 Pontiac G6 with 330K miles on it. Been paid for since 12. Still runs great. EVERY car I've had since the 80s I've put 200K on.
Dont be a fool. A car is the 2nd biggest expense. Stop trying to look "cool" for everyone else & get ahead in life.

[Ellen Forradalom]

14. Some of those expensive cars are pretty nice

I just test-drove a 2016 Subaru Outback and oh man, soooo nice.

But I don't think I'll get a new car until I've stockpiled enough for a good down payment and a reserve for payments. Used is fine for me.

[padfun]

15. I dont get my cars to look cool

I get them for the performance. And there have been great advances in automobiles in just the last 4 years.

In 2020, they will start using the new steel that is 70% of the weight and 4 times the strength of regular steel. That will make cars stronger yet lighter. Now if they can put that into all electric, we have something.

I think we are (too slowly) moving away from fossil fuels but realistically, that is still a decade or more away. So I do understand waiting a few more years to buy a new car. But the 2016 Mustang is sweet.

[7962]

17. If you can afford it, I've got no problem with it. But many who cant STILL buy.

I see it a lot when the company collects the rents

[padfun]

20. I know what you mean.

I can barely afford these payments. I bought the new one because I hit the back of a truck with my 2012 and with the hood bent up, I thought they might just salvage it and I pay the car off.

But the insurance company went ahead and spent the $7000 to fix it (I paid the deductible of $1000) and I now had two car payments. That is why I am getting the second loan. We can afford $100 extra a month and it will also let up put some money away.

I don't have many material wants. When I hit jackpots ($6000 and $5400) I don't know what to get. About the only thing I like is a new car. I work hard (State of Calif) and feel I deserve it.

And I do work hard. Right now, I am in charge of making our Access databases 64 bit compliant. Many are old and I am having to rewrite macro's into vba code, making API calls to 32 bit dll files work (user32, kernel32), an converting mdb files to accdb including coding new log in boxes. Not to mention adp and ade files.

There are about 3000 databases for just three of us to fix. We could use some more programming help if anyone wants a state job.

[7962]

21. Unfortunately, you lost me with everything that followed the word "Access"

But good luck!!
Sadly, I've let technology pass me by at age 55

[brett_jv]

29. I might be able to help you out ...

Been a DBA since 1999 (started with Access, now do mostly SQL Server with some MySQL, Oracle, PostGres projects).

I've done all the SQL code work and DB administration for a Fortune 500 company's web sites (backend for both the public-facing and corporate intranet) for the last 8 years.

Hit me up with a PM, I maybe wouldn't mind some side work, depending on what exactly we're talking about

[padfun]

39. If you are serious..

The State of California is desperate for IT people who know some IT. There are literally hundreds of openings just for APA and AISA jobs. You can take the exams online, and only go for Associate and higher. Otherwise you are going to start lower than you should.

The pay is lower than private IT folks (which is why we are desperate) but you get good benefits and a decent retirement.

Here is the link to both listings and exams: https://jobs.ca.gov/

[AwakeAtLast]

11. My 2000 Toyota Avalon is amazing!!!

Now mind you, it only had 60K miles on it when I found it in 2010, but it is by far the best car I have ever driven.

I'm going to cry when I finally have to get rid of it. Hopefully that won't be for another 15 years....

[csziggy]

16. I just can't see buying a new car ever again

They lose value so fast but you still have to pay the full price.

I like buying used and then I drive my vehicles to death. I don't treat them badly, I just use them until they are worn out.

[7962]

18. Good financial move

[Jimbo S]

32. That's what I do

My wife leases her car. Doesn't put many miles on it. When the lease is up, I buy it at the contracted price. I've already had a three year test drive, so I know the car.

[CTyankee]

38. I finally gave up my 1999 Altima last July and got a brand new Versa...

ast a certain point the old car is costing more in yearly repair than it is worth. I had saved up enough to get a new Versa (altho I hated parting with that much money). Now I don't have to worry if my car will start every day...and I don't have the burden of car payments each month with their attendant loan fees...however there are a few glitches which I am taking care of tomorrow with my first free oil change at the dealer's service dept.

[wolfie001]

7. Here in Maryland....

...a lot of Tee Vee ads screaming "$88 per month, no credit check!!!!!" Ginormous SUV featured. Here we go again.

[KoKo]

13. Another "lending Bubble" ready to Burst!

Bernie is exposing what Wall Street and the Bankers do to suck in people with more and more scams!

The latest is to extend the car loan payments to sucker you....same old, same old.

[7962]

19. Really; 72 & 84 month loans?? Ridiculous.

Let someone else take the depreciation hit. But it 4 yrs later for less than half the price

[PasadenaTrudy]

22. I only buy new

I suck at buying used. Had nothing but problems. Just bought a 2016 Camry last year 😊

[valerief]

24. Do they have bespoke tranche opportunities for auto loan securities? nt

[8 track mind]

25. this is why I buy used n/t

[JNelson6563]

27. I wonder how many are tempted beyond their means.

I bought a new car a few years ago.
When I applied for a loan I was told I could spend
24,000. Yeah. I sold my old car, gathered what money
I had and financed about 8,000.

I was all about borrowing as little as possible And was not
tempted to go the way of upgrade in spite of available credit.
Here in the land where many believe what you have determines
your value, the upgrade ( and higher loan/payment) would
not merit much thought.

Julie

[romanic]

30. Yeah I'm hearing a lot about this.

I have a friend whose a car salesman at a Ford dealership. He didn't give me specifics but he made a remark about auto loans being the new "house mortgage" of the decade. I knew right then what he meant and that worries me a lot.

[ProfessorGAC]

31. Doesn't That Number Seem Low?

$987 million is only $3 per capita. I know a lot more people keep their cars long after they're paid off. (We do.) And also like my wife and i, they buy late model used instead of new.

But when i hear about $400 per month payments, that suggests someone owing around $20k. That works out to only one in 6,600 people having a car payment. That would be one car payment in the whole town i live in.

Something just seems wrong with the numbers here.

[Babel_17]

33. Good catch, it's $1.05 trillion according to a different article

http://www.bizjournals.com/pacific/news/2016/02/09/u-s-auto-debt-increases-honolulu-ranks-in-64th.html

Total car debt in the nation reached $1.05 trillion by the end of the third quarter last year, and more loans originated by subprime borrowers, according to a WalletHub analysis. However, Honolulu residents were more prudent than the rest of the nation when it came to car loan debt.

Auto sales hit an all time high in 2015 of 17.5 million cars and light trucks sold, a 5.7 percent increase. With the increased sales came increased auto-loan balances and worryingly the share of car loans given to borrowers with credit scores below 620 is reaching approaching a decade peak, according to WalletHub. $33 billion of the $141 billion car loans last year were originated by subprime borrowers.

http://www.wsj.com/articles/total-u-s-auto-lending-surpasses-1-trillion-for-first-time-1439478198

[ProfessorGAC]

36. Now, That Number Seems More Realistic

Thing is, the whole other article makes almost no sense when the overall portfolio is so grossly understated. If only one in 6000 people has a car loan, how can delinquency be an issue?

Now with a number over a trillion, it makes sense.

[dembotoz]

34. friend of mine who isn now housing challenged shall we say....was shocked to discover she was still

upside down in her car...the asset she thought she could downsell to raise some cash
is still a liability.....

rude lesson

a car is like an appliance....do not let your ego run your life

[Kennah]

35. Some live paycheck to paycheck. We live overdraft to overdraft. n/t

[sarcasmo]

41. 17 payments left on my Honda.

Hope to have less than 65,000 miles on the Odyssey when it's paid off.