Americans struggling to make car payments is highest since Great Recession

[1srelluc]

Americans struggling to make car payments is highest since Great Recession A growing number of Americans are falling behind on their car payments, an ominous sign for the U.S. economy as high car prices and persistent inflation strain household budgets. Car repossessions tumbled in the early days of the pandemic when the government sent millions of Americans stimulus checks. But they have progressively ticked higher as sky-high prices for used and new cars alike forced consumers to take out bigger loans. In December, the percentage of subprime auto borrowers who were at least 60 days late on their bills climbed to 5.67% — a major increase from a seven-year low of 2.58% in April 2021, according to Fitch Ratings. It marks the steepest rate of Americans struggling to make their car payments since the 2008 financial crisis. Prices for used and new vehicles surged last year as a result of a semiconductor shortage as well as other COVID-19-induced disruptions in the global supply chain. Although there were fewer cars being produced, consumer demand remained strong, driving prices higher. Prices started to subside toward the end of 2022, but the average cost of a new car is still near $50,000 — a record. Rapidly rising interest rates have compounded the pain of higher car prices. The average new auto loan rate jumped to 8.02% in December, up from 5.15% one year ago, according to Cox Automotive. That, combined with steeper sticker prices, pushed new-vehicle affordability to the lowest level of 2022.

3 million new illegals arriving every year, that sucks up a lot of used vehicles, prices on used cars, rental homes, apartments, houses, etc won’t be dropping, demand will stay sky high.
I'd not be a bit surprised to see a 10% delinquency rate.

Oh well.....Go ahead and vote (or harvest) for Tater again.

 

[Moonglow]

I spent less than two grand on my vehicle 18 months ago...Try not buying expensive cars and trucks.

 

[BULLDOG]

Car prices always increase every year. Can you name a single year when new car prices didn't increase?

 

[MarathonMike]

I've never seen so many big shiny trucks with FOR SALE signs on them.

 

[Winston]

Americans struggling to make car payments is highest since Great Recession A growing number of Americans are falling behind on their car payments, an ominous sign for the U.S. economy as high car prices and persistent inflation strain household budgets. Car repossessions tumbled in the early days of the pandemic when the government sent millions of Americans stimulus checks. But they have progressively ticked higher as sky-high prices for used and new cars alike forced consumers to take out bigger loans. In December, the percentage of subprime auto borrowers who were at least 60 days late on their bills climbed to 5.67% — a major increase from a seven-year low of 2.58% in April 2021, according to Fitch Ratings. It marks the steepest rate of Americans struggling to make their car payments since the 2008 financial crisis. Prices for used and new vehicles surged last year as a result of a semiconductor shortage as well as other COVID-19-induced disruptions in the global supply chain. Although there were fewer cars being produced, consumer demand remained strong, driving prices higher. Prices started to subside toward the end of 2022, but the average cost of a new car is still near $50,000 — a record. Rapidly rising interest rates have compounded the pain of higher car prices. The average new auto loan rate jumped to 8.02% in December, up from 5.15% one year ago, according to Cox Automotive. That, combined with steeper sticker prices, pushed new-vehicle affordability to the lowest level of 2022.

3 million new illegals arriving every year, that sucks up a lot of used vehicles, prices on used cars, rental homes, apartments, houses, etc won’t be dropping, demand will stay sky high.
I'd not be a bit surprised to see a 10% delinquency rate.

Oh well.....Go ahead and vote (or harvest) for Tater again.

Everyone knows that car loans are going to be the next big "fail". The very same dynamics that initiated the mortgage crisis are in play.

 

[Toddsterpatriot]

Americans struggling to make car payments is highest since Great Recession A growing number of Americans are falling behind on their car payments, an ominous sign for the U.S. economy as high car prices and persistent inflation strain household budgets. Car repossessions tumbled in the early days of the pandemic when the government sent millions of Americans stimulus checks. But they have progressively ticked higher as sky-high prices for used and new cars alike forced consumers to take out bigger loans. In December, the percentage of subprime auto borrowers who were at least 60 days late on their bills climbed to 5.67% — a major increase from a seven-year low of 2.58% in April 2021, according to Fitch Ratings. It marks the steepest rate of Americans struggling to make their car payments since the 2008 financial crisis. Prices for used and new vehicles surged last year as a result of a semiconductor shortage as well as other COVID-19-induced disruptions in the global supply chain. Although there were fewer cars being produced, consumer demand remained strong, driving prices higher. Prices started to subside toward the end of 2022, but the average cost of a new car is still near $50,000 — a record. Rapidly rising interest rates have compounded the pain of higher car prices. The average new auto loan rate jumped to 8.02% in December, up from 5.15% one year ago, according to Cox Automotive. That, combined with steeper sticker prices, pushed new-vehicle affordability to the lowest level of 2022.

3 million new illegals arriving every year, that sucks up a lot of used vehicles, prices on used cars, rental homes, apartments, houses, etc won’t be dropping, demand will stay sky high.
I'd not be a bit surprised to see a 10% delinquency rate.

Oh well.....Go ahead and vote (or harvest) for Tater again.

And real wages continue to fall.

 

[Toddsterpatriot]

Car prices always increase every year. Can you name a single year when new car prices didn't increase?

Cars price inflation, 1935→2024

This calculator uses the official Consumer Price Index for Cars from the U.S. Bureau of Labor Statistics. Cars costing $15,000 in 1935 would cost $128,252.22 in 2024.

www.in2013dollars.com

 

[shockedcanadian]

There is another reason the younger generation wants to to work from home at such a high rate. The cost savings can be quite significant.

 

[okfine]

Living above your means and getting suckered into a deal with Santander or Wells Fargo, etc. is the buyer's problem. A buyer who thinks money is free is a buyer's problem. Buying when you are broke is a problem. Caveat emptor.

 

[excalibur]

And real wages continue to fall.

Unlike under Trump, until the Chineses Virus hit, when real wages increased the fastest in 40 years.

 

[shockedcanadian]

Living above your means and getting suckered into a deal with Santander or Wells Fargo, etc. is the buyer's problem. A buyer who thinks money is free is a buyer's problem. Buying when you are broke is a problem. Caveat emptor.

Citizens lack finance skills in too many places. It's unfortunate.

 

[sparky]

Back in the day, any fool could gap points with a book of matches......

 

[okfine]

 

[Moonglow]

Nothing better than driving your second mortgage.

 

[1srelluc]

View attachment 751758

Cars price inflation, 1935→2024

This calculator uses the official Consumer Price Index for Cars from the U.S. Bureau of Labor Statistics. Cars costing $15,000 in 1935 would cost $128,252.22 in 2024.

www.in2013dollars.com

I always heard that the 1946 demand was so high for new cars that you had to know someone to get one and it was at a hugely inflated price as supply was low.

There was also a glut of cash from returning GIs who had saved their money and something to do with cashing in/not buying war bonds that drove inflation a bit north of 18% in '46.....I'd never seen it on a graph before.

I suspect that when people quit buying Victory (War) Bonds inflation rose as they were a way to control inflation by removing money from circulation in a stimulated wartime economy so all that money hit at once.

Where have we seen this before?

 

[Moonglow]

I always heard that the 1946 demand was so high for new cars that you had to know someone to get one and it was at a hugely inflated price as supply was low.

There was also a glut of cash from returning GIs who had saved their money and something to do with cashing in/not buying war bonds that drove inflation a bit north of 18% in '46.....I'd never seen it on a graph before.

I suspect that when people quit buying Victory (War) Bonds inflation rose as they were a way to control inflation by removing money from circulation in a stimulated wartime economy so all that money hit at once.

Where have we seen this before?

2020 when Trump turned on the printing machines

 

[strollingbones]

and this ladies and gentlemen is why we need fiance classes in high school...to learn that the first years of a extended car loan are just interest payments...

The Financial Pros and Cons of 72-Month or 84-Month Car Loans

Do you want a new or used car but need an auto loan to get it? Here are the pros and cons of taking on a 72-month car loan or an 84-month car note.

askthemoneycoach.com

 

[strollingbones]

climbs on soap box: some simple advice or education on money and interest would go a long ways....if you want to see some bugie shit...drive past a high school parking lot...why does a kid in high school need a 50 k truck ..why does anyone need a 50 k truck...why does anyone need a 500 k house? full disclosure here...i am cheap...i drive a 2008 sonata...i call her blanche...she is on the down hill side but i always counter that with 3 words..its paid for...

consider deprecation when buying anything...do you really need it if you cant pay cash? i know buying a house in cash is hard but the more you pay upfront the less you pay on the back end...that can be said for about everything...we are simply a country of immediate gratification...if you want it you deserve it...when the hell did that become the motto?

and normally i dont like to tit rip my gender but damn ladies...100 purses? 150 shoes? botox at 100 a unit...there are 10 units in a vial..the provider pays 100 bucks for the vial ...then hits you up for 100 a unit? and it normally takes more than one unit to do a face...all those matching purses and shoes...and the fake jewelry and the make up...good lawdie..the cost of painting a new face every day

but yes we need finance classes and damn civics classes ...plus i am all for trade schools...

*climbs down*

 

[Blaster]

A dumb idea.

Dems propose 8.7% pay raise for federal workers to make up for COVID, Trump

House Democrats this week proposed legislation that would give federal workers a 8.7% pay raise, which they said was needed after dealing with COVID and former President Trump.

www.foxnews.com