HomePoliticsBidenomics: Americans Falling Behind on Auto Payments at Record Rate, Mass Repossessions...

Bidenomics: Americans Falling Behind on Auto Payments at Record Rate, Mass Repossessions Looming

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An updated depiction of the challenges faced by American consumers in meeting their financial obligations is provided by data indicating an increase in the number of vehicle owners who are unable to make timely payments.

Bloomberg reports that the percentage of subprime interest rate debtors who are 60 days or more behind on payments reached 6.11 percent in September.

Since 1994, this is the greatest percentage of individuals who are homeless; it has risen from 5.93 percent at the beginning of the year.

“The subprime borrower is getting squeezed. They can often be a first line of where we start to see the negative effects of macroeconomic headwinds,” Margaret Rowe, senior director at Fitch, said.

The subprime category includes borrowers with subpar credit ratings who may pose a payment default risk.

Bankrate reports that the mean interest rates on auto loans for borrowers with excellent credit are approximately 5.07 percent for a brand-new vehicle and 7.09 percent for a pre-owned vehicle. The pay for the lowest rated vehicles averages approximately 21.38 percent for used vehicles and 14.18 percent for new vehicles. Borrowers with subprime credit fall between the aforementioned extremities.

Consumers forfeit their vehicle if they lag behind excessively.

Insider reports that Cox Automotive estimates 1.5 million vehicles will be repossessed this year. This is an increase of 300,000 compared to 2022.

Repossession, according to an insider, can frequently set off a sequence of events that culminates in the loss of employment, as transportation is crucial for getting to work in many communities.

According to a CNN report, the trend line indicates that the issue will likely worsen.

The report cited Moody’s current projection that the rate of delinquent auto loans will increase to 10% by 2024.

CNN reported that consumers are falling behind in areas other than auto loans.

During the second quarter, the rate of new credit card delinquencies increased from 6.5 percent in the preceding quarter to 7.2 percent.

This indicates that the rate has risen above its pre-pandemic level.

Bloomberg reported that credit card debt surpassed $1 trillion in the second quarter.

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