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.
“Consumers starting to buckle for first time in a decade, former Walmart U.S. CEO Bill Simon warns”
Record credit card debt & car loan amounts and duration- inflation…. Bidenomics at workhttps://t.co/4omFZTdKYD
— DC (@bioadultmale) October 12, 2023
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.
WHAT DID WE LEARN TODAY?
Bidenomics is working so well that we have the HIGHEST CREDIT CARD DEBT ever and Car loan delinquancy rate is skyrocketing!
— Arms Johnston (@JohnstonAr41492) September 15, 2023
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.
Watch and see, Trav… Almost EVERYONE has been surviving off of credit cards for the past 2 years…😑
Unfortunately, the BILL is about to be due, and I doubt MOST will be able to PAY and STILL feed their families…🤦🏼♂️🤦🏼♂️🤦🏼♂️
We’re heading for ECONOMIC COLLAPSE!!! It’s simple math🤬
— Trevor Thacker (@trethack24) October 16, 2023
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.