Connect with us


Over Half a Million Americans 60 Days Late on Car Payments



Mini's sitting on dealer showroom floor

Image: David Zalubowski (AP)

Expensive new car prices are tough enough to swallow. But the price of vehicles in general have been relatively high, with the average price of a new car hitting over $48,000 in July, and continuing to hover there; used car prices are averaging almost $31,000. It hasn’t deterred people from buying them, but it turns out many owners may be in over their heads. The number of delinquent auto loans has increased substantially, to 1.65 percent, as pandemic forgiveness programs come to an end, CNBC News reports. And while that doesn’t sound like a big number to worry about, it’s the highest percentage of delinquencies in over a decade.

Data from TransUnion shows that about 200,000 people took advantage of pandemic auto loan accommodations during the early days of the pandemic. These programs were put in place to protect people whose income had been affected after losing their job or any other ill-effects of the pandemic.

Those programs have since ended, bringing those owners to a harsh reality. Those same 200,000 people who took advantage of the program, are now 60 days delinquent on their auto loans, according to TransUnion. Another 100,000 loans are also 60 days delinquent but are in similarly designed accommodation programs that continue to keep their cars from being repossessed.

While the country experiences some of the highest delinquency rates on auto loans (and accompanying rising rates of auto loans), the vice president of TransUnion, Satyan Merchant, thinks the auto market still remains healthy, for now. “If we get into a position where employment starts to be a challenge in the United States and unemployment increases, that is when the industry will really start to be concerned about a consumer’s ability to pay their auto loans,” he said to CNBC.

However, he loses sight of the fact that employment doesn’t necessarily mean someone can’t be late on a car payment. People are still buying vehicles and getting themselves into risky financial situations doing it. Auto loan interest rates have gone way up, with the average rate for new vehicles hitting 5.2 percent in September and near subprime around 9.7 percent for used cars. To make matters worse, many buyers are willing to accept longer and longer loan terms, upwards of 84 months, to make these payments work for budgets. Automakers seem to be encouraging it. Go to any build and price tool for something a Ford F-150 or Chevy Tahoe and payment terms for financing will default to 72 or 84 months. That’s 6-7 years of payments.

People really need to think things through when purchasing a vehicle and make sure what they’re buying works for them financially. I know it’s hard to resist that shiny new metal toy and not buy a car impulsively that you really can’t afford. In some cases, folks have had little-to-no choice because of the state of the market and they need a car to get them to and from places. But if you can, try to avoid getting yourself into a loan situation you know you can’t get out of. It’s only going to hurt you more later on.

Continue Reading

Recent News

Termite Treatment Termite Treatment
Home11 hours ago

Mastering the Art of Pest Control and Termite Treatment: A Comprehensive Guide to Protecting Your Home

In homeownership, there are few concerns as pressing and potentially devastating as the threat of pests and termites. These insidious...

Cold Cold
Lifestyle1 day ago

6 Tips for Working Out in the Cold Season

As winter’s icy embrace tightens, maintaining an active lifestyle demands fortitude and savvy adaptation to the cold. However, armed with...

insMind insMind
Tech2 days ago

Reimagine Your Photos with insMind: The Best Free AI Background Generator

Imagine turning a simple snap into a studio-quality image in seconds. No technical skills or hiring professionals are required. Sounds...

Sickness Insurance Sickness Insurance
Health4 days ago

Exploring the Essentials of Sickness Insurance

In an uncertain world where health is often unpredictable and sickness is common, insurance stands as a pillar of financial...

Manchester Manchester
Real Estate4 days ago

Manchester Property Market: Future Growth and Expert Insights

For those seeking lucrative, low-cost, high-yield investment opportunities, the property market in Manchester currently presents a compelling case. Estate agents...

Baking Baking
Food5 days ago

3 Reasons Why Baking is a Great Hobby for 2024

Life in 2024 is fast-paced, making it hard for people to find time for hobbies they enjoy. However, if you...

Visa Visa
Travel6 days ago

Which Countries are Visa free for Malaysia?

For Malaysian travelers, the ease of visa regulations can significantly impact travel plans and opportunities. Visa-free entry to certain countries...

Custom Notebooks Custom Notebooks
Lifestyle1 week ago

The Top Benefits of Using Custom Notebooks for Work or School

Custom notebooks have become increasingly popular in recent years for both work and school purposes. These personalised notebooks offer a...

Goron Tula Goron Tula
Health1 week ago

Goron Tula: Embracing Nature’s Healing Touch for Optimal Wellness

In a fast-paced world filled with artificial remedies and quick fixes, the allure of a natural care and wellness product...

Lease Cleaning Melbourne Lease Cleaning Melbourne
Lifestyle2 weeks ago

End of Lease Cleaning Melbourne: Ensuring a Smooth Transition

Moving out of a rental property in Melbourne? End-of-lease cleaning is a crucial final step, ensuring you meet the stringent...