More and more Americans are struggling to pay their car scoop

The percentage of auto loans that are at least 60 days past due reached 1.65% in the third quarter of 2022. This is the highest delinquency rate in more than a decade and indicates that car owners are increasingly struggling to pay for their vehicles.

Rising delinquency rates for auto loans are associated with many factors, including rising inflation. with price With all commodities on the rise, owners who have loans on their cars may find it harder to pay their loans now than they did when they signed the deal, even if they were earning the same amount. I have.

“Consumers still want to stay as up-to-date as possible. this inflationary environment Satyan Merchant, Senior Vice President of TransUnion, said: CNBC“They have to pay more for eggs and milk and other things, so there are fewer dollars left in their pockets to pay off their car loans.”

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The consumers feeling the biggest impact are subprime borrowers with low credit scores and often low incomes. The surge in delinquency rates is also linked to the termination of several loan adjustment programs set up during the pandemic designed to provide relief to car owners who may have lost their jobs during the pandemic. There is a possibility that

“The effect was that delinquencies that may have occurred over the past few years were actually pushed out or delayed because consumers didn’t have to pay or were staying at an accommodation. Now some of them are a hit,” Merchant said.

Also, the price of new cars is very high. Automakers struggled to produce new vehicles during the pandemic, but demand remained strong, driving prices higher and dragging them down. used car with them. This could be putting pressure on people who took out loans to buy cars.

Merchants claimed the loan market remained healthy despite the signs. Low unemployment keeps delinquencies in check. But if it changes industry is I’m worried.

“Once jobs start to get tougher in the US and the unemployment rate goes up, the industry will really start to worry about consumers’ ability to pay for their auto loans,” Merchant said.

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